Tesla (TSLA) is a growing cash cow

Tesla (TSLA) reported second-quarter 2021 earnings of $1.45, which surpassed the analyst consensus of 90 cents per share. Higher-than-expected automotive gross profit resulted in outperformance. Precisely, automotive gross profit came in at $2,899 million, topping the consensus mark of $2,504 million. The bottom line also smashed the year-ago earnings of 44 cents a share. Total revenues came in at $11,958 million, surpassing the consensus of $11,389 million. The top line also witnessed year-over-year growth of 98.1%.

Importantly, the firm generated a free cash flow of $619 million during the quarter. This last point is essential as it means that Tesla can generate cash by itself. It implies that in the future they won’t be capital raise anymore which dilutes shareholder capital.

Summary: Tesla destroyed analyst’s expectations and made tons of money. No wonder when you drive shit cars that you do not understand the future.Everyone wants a Tesla (read the summary):

Delivery and production totaled 201,304 and 206,421 vehicles, reflecting a year-over-year jump of 121% and 151%, respectively. Tesla reported stellar second-quarter 2021 production and deliveries despite global chip shortage, thanks to the increasing popularity of green vehicles, preference for personal mobility, easier credit conditions, and economic recovery buoyed by accelerated vaccination drive as well as massive fiscal stimulus.

Model 3/Y registered production and deliveries of 206,421 and 199,409 vehicles, reflecting whopping year-over-year growth of 169% and 148%, respectively. Meanwhile, production and delivery of Model S/X fell 63% and 82% on a year-over-year basis to 2,340 and 1,895 units, respectively. Even if this was anticipable, these are bad news as margins are whey smaller with model 3 and model Y than with the model S or X.

Total automotive revenues surged 97% year over year to $10,206 million for the reported quarter. This included $354 million from the sale of regulatory credits for electric vehicles, which decreased 17% year over year. Automotive gross margin was 28.4%, improving 298 basis points from second-quarter 2020. This is key as margins are what finally determine how profitable a company is.

Summary: Everyone wants Teslas and margins improved. At least retarded start grasping the potential of these cars.Energy and storage (read the summary):

Energy generation and storage revenues came in at $801 million for second-quarter 2021 compared with $370 million in the year-ago period. Services and other revenues were up 95.2% years over year to $951 million. These digits show that Musk is now able to use the knowledge developed for car batteries for producing home batteries used for saving electricity in countries where the electricity grid is no good. Moreover, the current trend in the decentralization of electricity production will lead to the increasing demand for such batteries for saving electricity generated at home, through solar panels, or other sources. By also having solar panels, through the acquisition of Solar City in 2016. All in all, it means that Tesla is getting closer to its target to be an ecosystem where customers produce their own electricity, save it overnight through batteries, and then can charge their Tesla.

Summary: When some companies sell cars, Tesla sells electricity, storage, and cars. Even the dude buying the Ford Mustang Mach-E will use Tesla for its electricity and storage of electricity. So, I will get rich whatever EV you buy!Why you will get rich (read the summary)?

Production target :

While Tesla has not provided any clear delivery target for 2021, it reiterated its goal of achieving 50% average annual growth in vehicle deliveries over a multi-year horizon. Looking at the current results (+ 121% YoY), this target seems to be easily achievable and may even be overshot which would give a further push to the stock.

“Despite minor shifts in the timeline, we expect the introduction of Semi and Cybertruck to be positive catalysts for Tesla stock in the intermediate term,” Baird analyst Ben Kallo said in a note to clients. He maintained an outperform rating on Tesla stock. His price target was raised to 764, from 736.

Risen estimates

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 8.09% due to these changes. This is key. It means that investors were surprised by the results of Tesla and become more ambitious about its future. Even if Musk promises a lot, analysts are still surprised and raise their target price.

Summary: One more time, analysts are asleep. Tesla will smash their boomers’ expectations and the stock will go to the moon! 🚀 🚀 🚀Dangers (read the summary):

Competition increases:

Meanwhile, China-based rivals NioXpeng and Li Auto recently reported sales.

Fake advertising:

Even if Musk presented a new humanoid able to do repetitive and boring tasks, some investors were not convinced of the realization of this project. They even perceived it as further proof that Musk is enabled to respect deadlines. For instance, Dan Ives, a Wedbush Securities analyst, in a note to clients early Friday said that: “Unfortunately, as we have seen with robotaxis and other future sci-fi projects for Musk, we view this Tesla Bot as an absolute head-scratcher that will further agitate investors at a time the Street is showing growing concern around rising EV competition and safety issues for Tesla,”

The safety issues Ives mentions are what investors should be attuned to right now because it appears the government is finally stepping up and taking note of a problem that seems essential: Musk repeatedly oversells the current and near-term potential for his automotive autonomy advanced technology.

Summary: Some dudes are heavily buying Xi’s cars. However, Tesla is clearly above the competition. Uncle Sam is starting to be annoying with probes against fake advertising considering the software in Teslas. However, I believe that the government will be loud but do nothing in practice (as always).TLDR:

Last earnings show that analysts are old boomers who understand nothing about technology. Hence Tesla destroyed their expectations. Growth in deliveries was massive, profits and revenues jumped. Analysts are not only retarded but also have little balls. Hence, they doubt the capacity of Musk to reach his objectives and others are afraid of lawsuits again Tesla due to false advertising. No worries boys, Tesla is on the right track to reach its long-term goal. Soon we will all have full freedom over our production and consumption of electricity. Then we will go two times quicker than retarded analysts in our brand new Teslas.

This article was written by u/Puffy_Reality_.