Don't be FOOLED | Tesla Earnings Preview

Alright guys, it's that time again, let's talk about Tesla's next earnings call coming up this week. We are at a critical juncture in Tesla's journey as we have RoboTaxi launching, Elon getting out of politics and then getting back into politics, and a possible new model coming as well. There are a lot of moving parts that could move the stock up or down big time. So what exactly is the impact going to be and what is it going to do to Tesla stock? Well don't worry guys, I will answer all of this today for you, and I'll tell you exactly what my plan is, and give you an alternate plan as well, and I'll tell you the price I will look to add more Tesla shares at. I just ask in exchange for you to gently tap that like button and consider subscribing to It's Super Easy To Do if you like the truth about the hype guys. So in the best case scenario, I think Tesla barely beats on either EPS or revenue numbers, but that's kind of a best case there, I doubt we'd get both. But sadly, seeing a miss on both wouldn't be surprising at all, just kind of given all the churn and just kind of everything kind of coming all at once right here for Tesla. It is very hard to hit estimates when delivery numbers aren't exactly where we want them to be, which of course makes it hard to hit EPS numbers as well, when you've been seeing margins erode over the past year and a half or so, and you don't get an upswing elsewhere that we know of. At least, you know, I mean, obviously you can pull a rabbit out of the hat, something else can happen, but for right now, from what we know, we're not real sure what's going on there beyond speculation. But to me, there is something even more important on earnings than this that will determine where the stock goes after the earnings, and we will get to that shortly. So we'll talk about future expectations here in just a second, which to me are much better, much better than what we're looking at right now. And I'm much more optimistic about Tesla during that timeframe, but there was a lot of maneuvering that had to go on this quarter in order to really just get the numbers where they're at. Now to be upfront, and just so you guys know, before everybody goes down and yells at me down the comments, Tesla has the margins to easily absorb all of this, but margins have been eroding and that is not something you like to see at all. You want to see margins going the other way like they were just a few years ago. That is how you get a big sustainable run on a stock because you're going to see those bottom line profits and you're going to have the big institutional support to keep that number up there. Add in all the expansion at the various factories that just kind of seems to never end. Expansion of Robotaxi itself and what's going on there with that and Optimist spend and other R&D spend, and you have a recipe for a less than desirable EPS number once again. But the good news is we may be at the end of that journey this quarter. We'll have to wait and see what they give us, but it is a possibility there. I'm not saying that spend isn't necessary or it isn't great, but it does hurt the bottom line unfortunately. So even if the numbers don't meet expectations, which the consequences will be harsh in the short term as a long-term investor, I'm not concerned at all as I understand the why behind why they may not meet expectations. But we are dealing with Wall Street guys and earnings is their game. It is not our game. So these are the five big concerns that I have coming into this earnings call that are going to impact this earnings call and the share price more importantly. But don't worry, I also have a massive positive as well for Tesla to look out for because if it comes, it is an actual catalyst for the stock. We will also talk about any short-term issues or they actually long-term problems and we will talk about what I'm doing with Tesla stock to include what price I want to buy at. So concern number one, EPS could be down again. Now look, this isn't me being bearish at all. This is what Elon and company there at Tesla have told us what's happening has clearly been happening and clearly delivery numbers show no signs of an uptick in regards to EPS or any other place. Again, this is management has told us this was going to happen. Then it has happened and they repeated that hey, it may take some time for us to get out of this and see the uptick in EPS again margins appeared to kind of stayed under pressure once again this quarter for a variety of reasons. And unfortunately, despite great energy numbers, once again, we don't know what the effect will be on the bottom line because it still makes up such a small part of the overall profitability picture. Now one day. It's going to get there guys. I agree completely, but we're talking about earnings today and today. It isn't there. I'm sorry. You can't just, you know, say I think it's going to be worth X trillions in the future. So therefore I can just apply today. That's not how it works. Guys. Sorry. Now, of course, Elon can pull a raven out of the hat the last time, you know, once again, he's done it before but it's been more than a year since we've got back-to-back big jumps in EPS. Actually, we're getting closer to two years now since that's happened. I'm not saying it's impossible. Just saying that it's a concern and something we have to be cognizant of and certain number to energy. Now, I hear you guys already yelling at me like I get constantly about energy being up massively and it's not a car company anymore and all the other stuff like that. And it has actually been one of the few bright spots over the past year. I know guys. I got it. And I agree. However, the concern is, is that it still doesn't add much to the bottom line, which was proven last quarter when the numbers were good, but it still didn't help out as much as everyone was telling me it would help out. And I continue to say every single earnings period that if Elon doesn't give continued positive guidance and instead says it, the energy is going to continue to be unpredictable and not something to really count on here and over the next quarter or two, it means very little to investors. And that is exactly what he said on the last earnings and exactly how Wall Street treated it. So for me, energy is still nice to see, but not nearly as big of a deal as many folks make it out to be. It's coming for sure. I agree. They're completely, it is growing. I love the product. I love everything about it, but it's not this quarter and it's not going to be anytime soon. Unfortunately, until we see massive, massive profits on that bottom line. Concern number three, Elon drama. All right. You guys know it. It just is what it is. The guy has so much going on, but he continues to make waves and there's a lot to unpack here. So just stick with me in regards to this earnings call, Elon has always been a wall card that sometimes hurts more than helps Tesla as he speaks off the cuff and can be competitive and just really, he can just say things that are off the wall or who knows what direction it will go. That's why we love them and why he drives Tesla to new heights being that eccentric of a personality. However, it also hurts the share price in the short term sometimes as well. And we have to be willing to acknowledge that. Now, earnings calls are where you talk about the past quarters, earnings performance, and then you project out where, you know, you basically see Tesla going next quarter, uh, you know, through the end of the year and maybe, uh, you know, maybe you talk about next year a little bit and then you maybe at the final section, you give some big future things coming, you know, like optimists or something else of that nature. You kind of tease it a little bit and then you kind of move on, but that's not Elon style at all. He'll talk about that stuff. The entire earnings call never get to anything that actually matters for the quarter. It is random. It is wild. And like I said, he may discuss, he may spend the entire time just talking about stuff that's years into the future or may never happen or not even on the radar. Tesla's earnings calls are always wild. That's why they're so critical that you listen to them. And if you're serious about your investing and you want to work directly with me, we will be going live for Tesla's earnings, life for Palantir's earnings as well, for all the people like you who take advantage of the earnings flash sale where you can ask me questions live during those earnings calls along with take the five courses, get your free coaching and so much more. We'll talk more of this at the end of the video. It's the pin comment down there for those that are interested. Now, Elon isn't over with, right? We got more to discuss in regards to Elon drama. He finally stepped down and returned to Tesla full time, stating that he was back to sleeping in the office again. But then shortly after that, he decided to start another political party and has been railing against various political initiatives, basically staying engaged with politics, which is something we don't want to see. I'm not running down the political rabbit holes here on this channel. You guys know I hate all politics with a passion. I hate it when any CEO gets involved with politics at any level, hate it. Can't stand it. Don't want to see it from any CEO. I don't care what side they're on, agree, disagree, whatever the case is. I don't want to see it personally from my CEOs. Now, what the effect is remains to be seen, and I don't want to speculate since we've never really seen a publicly traded CEO before attempt to start a political party without stepping down as the CEO of that company. This is new territory for sure. So the only tangible answers will be found with earnings. That's it. Not opinions or social media speculation or media speculation or any of the other noise. And we also know Elon can't stay off X for any length of time and is now staying in politics to some degree, which doesn't help much either in terms of large investors perceptions about him. Even those that share his political lean are not fans of this approach because many already view him as distracted. And that is why they don't invest bigger in Tesla. So you can be sure this is weighing on people's minds during the earnings call. And if you don't think someone Wall Street won't draw the conclusion that Tesla missing estimates, for example, are missing on earnings is a direct result of him not being focused. Sorry, guys, you guys don't understand how they work. Unfortunately, I'm not saying that it's fair or that it should have, you know, many sort of meaningful bearing on Tesla stock. It's not what I'm saying. What I'm saying is, is fair or not. If that happens, it will have a short term impact on the stock price that is guaranteed. There's a reason why Tesla is the most volatile large cap stock that has ever existed by a mile guys been doing this for over 25 years and companies valued at 20% of what Tesla is valued at are not usually this volatile. Bottom line is, if the numbers don't meet expectations or if Elon says something that can be viewed as negative or crazy or whatever the case is, the stock may very well get pounded once again. That is just the reality of the market we're in right now and how high, you know, how hot the market is overall and the situation with Elon. Concern number four, continued lack of guidance. Well, unlike almost every company this year, Tesla did not get formal guidance for 2025. I understand a lot of companies have pulled their guidance, but they gave guidance in the first place. And then they pulled it. Tesla never gave guidance to begin with. That was the first time in a long time that I took a pause and really had to think about what it meant. I mean, were they waiting for more of their internal data with a new vehicle releasing so they can give better, more accurate guidance? I mean, that's the benefit of the doubt I gave management last earnings call, but we didn't get guidance once again. So it's definitely kind of a mystery to me that I'm, I'm honestly stuck trying to solve and I don't have a good answer for it. So if they give no formal guidance once again, this quarter and more importantly, don't really explain why or the reason why it's very poor, well, that becomes problematic and is a red flag for sure. Now, of course it takes more slowdown before you yell at me guys. It takes more than one red flag to say there's a massive problem, but it is not prudent at all in my opinion to call that anything less than a red flag and something we need to watch. Concern number five, valuation. Tesla is trading rich right now by any metric and unlike in past years, the next earnings has not provided that push needed to push the valuation back to a more reasonable level. As a matter of fact, if the EPS number is too low, it can actually push the valuation into even richer levels. Even if the stock goes down, I'm not saying it's going to happen. I'm just saying it's a possibility that is the opposite of say an NVIDIA a year or so ago when they got undervalued and bang, right after earnings and a giant move up the stock, the earnings were actually strong enough to put the stock into undervalued territory once again. Now to be fair, Tesla has done that in the past too. That's why we love Tesla, right? But right now Tesla has been doing the actual opposite. So that is a concern for sure that we can see this share price go down while simultaneously seeing the valuation get even richer. That is not a good spot for sure. So what is the one thing that could push Tesla stock? This one is very simple, guys, and I'm sure I'm going to get blasted for this one too. It's not RoboTaxi or Optimus. I'm sorry. I know Tesla bulls will be mad at me, but those are years away for either of those to have any meaningful impact on earnings itself. I know some out there believe RoboTaxi is going to kill Uber and Lyft and Waymo and all taxi services next quarter. But for those of us that live outside the hype bubble that has been saying that actually for the past 16, 17, 18 quarters or so, we know it's going to take time and that's not actually true. I love the progress. It will be interesting to see the updates they have coming and the plans for future expansion. That is all exciting, but we are not seeing significant bottom line contributions that will matter to the stock price for a long time still to come. I know, I know. Some like to add trillions to the market cap today for it, but that's not the most likely scenario and most certainly not what investors are thinking at all. So it's not those at all guys. That is not what's going to be the big mover for me, for me, the big catalyst could come if Elon gives us in full details, everything about the next model and it will actually release this quarter or, you know, cause obviously it didn't release last quarter and it won't have any sort of significant delay. And more importantly, he gives us actual guidance for Tesla stock and it looks good. We really like what we're seeing and I'm talking about tangible details like it's coming, you know, this quarter and we're going to sell it for $25,000, whatever the price is going to be and all the other details around it, how many they think they're going to sell, what it's going to put to the bottom line and everything else that would truly be a catalyst for the stock. Now, if he doesn't address it at all and basically says the same thing as last earnings, then obviously it's not a catalyst for now since we have nothing to go off of. And unfortunately, Elon time many times means delay. So that will temper excitement for sure. If we get something tangible about the new model in the past quarter and we actually get guidance of some sort, then we have a formula to really have some fundamentals to back up the stock price action we have seen the past few months to give us that rich valuation that we have right now. I know you guys are wondering, is everything around Tesla basically short term noise or are they longterm problems? And this one is honestly tricky to say the least. Normally, this is easy to assess and would simply be short term noise. I still lean towards it being short term noise, hence why I haven't sold a share around any of the noise that's gone on the past year. As a matter of fact, the fact that Tesla declined the past year plus right along with the rest of the auto industry tells me I actually was right on two fronts when all this started to happen. The first is that Tesla has seen a decline just like everyone else, meaning that everyone predicting doom and gloom around Elon's venture into politics has once again been overblown. Earnings for Tesla and the rest of the automaker tell me that is true. Not social media opinions, but the actual data. And it also tells me that I was right to use valuation as my guide on Tesla and to ignore silly talk like Tesla isn't cyclical like the rest of the car industry because it's not a car company. The data clearly shows me otherwise and I was right there as well. So for me, all this stuff that's out there right now is short term noise. Now, having said that, if Tesla's numbers continue to erode, but legacy auto, for example, sees a significant uptick in their earnings this quarter, then we can start to build a case that we may have a long term problem. To be clear, we are not quite there yet. I'm just putting that on you guys's radar, but if that happens, it's not something I can easily dismiss like I could before. Remember, guys, this is so key for all of us to remember as investors. Being emotional about a stock is honestly just silly. Being in love with a stock to a point where you ignore fundamental changes or the fundamentals all together is how you lose a lot of money in the stock market. A lot of people loved Tesla. They love the story. They love the future. And they loved all the to the moon narratives and pretty charts and graphs and everything else way back in twenty twenty one when Tesla was at four hundred dollars per share. Unfortunately, those that bought at four hundred based on all that stuff learned those things don't matter at all. Fundamentals matter over the long run. Not the story, not hope, not hype, not ridiculous spreadsheets or projections out to twenty forty or anything else like that. Again, we're not there yet. I'm not saying we're there yet. I'm just giving you guys a scenario where I would personally have to start assessing things further and make hard decisions with Tesla stock. But what am I doing personally? This is where having your plan set before the earnings call is key. I know many of you guys hate that I say it, but planning and having price targets is key to investing, especially with Tesla, because it's such a unique stock. But you absolutely can take advantage of this uncertainty if you play the long game and stay away from all the short term speculation that goes on. So I have cash ready to deploy and I don't care about the price action nearly as much as I care about how the business is performing and will happily deploy capital if we get great guidance that justifies a higher valuation. And of course, Wall Street gets dumb enough. I've got to have both those things to happen to be interested in adding more. But I'm taking a cautious approach. But it's absolutely critical you understand this next point. There are basically two options I feel work best for me to buy Tesla stock. The first is a modified DCA. This is why having a plan, price targets and just executing is so important with investing because it allows you to be selective and not be forced to play games or trade or hedge or FOMO in because of stupid price targets given by folks out there and anything else like that. I have a full position. I've been very clear about that. So I'm just looking to add bonus shares at this stage. I don't need any more Tesla guys. And most of my shares were bought a long time ago. But I have been selectively adding over the past three years in the mid to low 100s repeatedly. And that is where I am still looking to buy. That is how you take risk out of a stock by being patient and buying when the valuation makes sense. That's one option right there is to do a modified DCA. The other option is to just do a simple DCA and move on. It's honestly the safest way to buy Tesla stock until you get more experienced and develop the skills to do a modified DCA on a stock like Tesla that is so volatile, which the earnings flash sale is live where we teach exactly how to do that. You get that through the courses, through coaching. You get that being a part of the best six, seven and eight figure discord out there. You can talk to me anytime you want to do live Q&As. You can jump in my DMs. You can just post right there in the group. There's so much involved in the group, guys, so much learning that goes on, so much support exactly how to start from zero to hero. Make sure you check it out. It's a pinned comment down there before the flash sale ends and click this video here if you want to see exactly what I'm buying in this market and click here to see my exact plan for this market. So thanks for watching and we'll see you in the next one.