Behind the video
Tesla Q3 Earnings & EPS: FINAL EST
Overall Thesis
The host estimates Tesla's Q3 non-GAAP EPS at $0.41 versus a $0.45 consensus, while expecting sequential improvements in revenue and margins. His enthusiasm centers on FSD subscriptions and paid robotaxi rides rather than quarterly earnings surprises, and he makes no qualifying stock-direction call.
Narratives
SPCXSpaceXSpaceX appears in discussion of its upcoming earnings coverage and speculation involving Tesla. The host also references another speaker's theory about Tesla outperforming SpaceX, without adopting a directional investment forecast for SpaceX.
Key Arguments
- The host plans to cover SpaceX's earnings report and call.
- He suggests Tesla–SpaceX speculation may explain Tesla's current stock movement.
- He promotes a separate podcast discussing the two stocks and a possible merger.
Risks acknowledged
- The relative-performance theory is attributed to another speaker and is not explicitly endorsed.
- No SpaceX share-price target or forward investment action is stated.
TSLATeslaThe host is optimistic about Tesla's operating progress despite estimating an earnings miss. He emphasizes recurring FSD subscription revenue and paid robotaxi rides, without committing to a future stock price, return or investment action.
Key Arguments
- His base model estimates $0.41 non-GAAP EPS, compared with Wall Street's $0.45 expectation.
- He estimates revenue above $29 billion, total GAAP gross margin of 17.6% and operating margin of 2.9%, each reflecting sequential improvement.
- He expects close to 300,000 additional monthly FSD subscribers, bringing the total close to one million.
- He sees recurring FSD subscription revenue as an important high-margin contributor.
- He identifies cumulative paid robotaxi rides as another key metric, with more expansion expected to affect Q4.
- He explains that improved earnings would lower the price-to-earnings ratio if the share price stayed unchanged.
Risks acknowledged
- The base EPS estimate would miss consensus.
- Energy deployment was below his earlier expectations.
- Elon Musk's compensation package contributes to elevated operating expenses.
- Operating margin remains low despite sequential improvement.
- An earnings beat could potentially produce a sell-the-news reaction, but he does not endorse that outcome as a forecast.
- The $0.57 EPS estimate is another commentator's forecast, not his own base estimate.
Hedges & Caveats
- Several earnings-model inputs could be higher than his base assumptions, including average selling price, services revenue and operating expenses.
- Expected energy deployment fell short of his earlier hopes.
- Operating margin is expected to improve sequentially but remain low.
- Much of the robotaxi expansion is expected to affect Q4 rather than Q3.
- He raises a possible sell-the-news earnings reaction as a question and defers a conclusion.
- The suggested short-term Tesla outperformance versus SpaceX is attributed to another speaker in a separate podcast.