| | | Tesla: 100 X earnings, declining margins, rocky cash flow, poor fundamentals, rising competition, psycho in charge:
The absence of near-term catalysts comes at an already challenging time for Tesla. Lackluster demand and increased EV competition from the likes of GM have pressured sales and margins in recent quarters, and it’s a trend that pros warn is unlikely to change anytime soon.
In Q2, the company reported operating margins of 6.3%, compared to 14.6% just two years earlier.
Guggenheim’s Ron Jewsikow, who sees fair value around $153 per share, told me that post-robotaxi event, investors will “return to focusing on the fundamentals of the business,” which he characterized as “quite poor.”
“A business trading at 100 times next year's earnings, with little to no free cash flow, is really difficult to underwrite,” he added.
With its shares falling 9% on Friday and down over 17% in the past year, it’s safe to say Tesla has a lot to prove when it comes to the fundamentals. Its next big test will be its third-quarter earnings, scheduled for after the bell on October 23.
Will it be more hype than fundamentals? Buckle Up!
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I think I’ll short me some for fun and profit. :-)——- |
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