Tesla (NASDAQ:TSLA) Key Quarterly Earnings Report Coming
- Selling Vapor Ware and taking deposits on cars that cannot be produced and delivered do not produce earnings.
Tesla’s (NASDAQ:TSLA) Mission: “Accelerate the world’s transition to sustainable energy.” It says soon on its website.
My Big Q is: Why?
The Big A: 1st Tesla has to prove it is sustainable as an ongoing concern, my work shows that it has just $66-M that is not encumbered.
A lot is riding on its earnings results it is scheduled to report early in November.
CEO Elon Musk always goes out of his way to assure investors that the company has plenty of cash. I have and continue to question that.
The company finished June with just $2.24-B in cash on hand, and had negative $2.4-B in working capital meaning current assets minus current liabilities, the money needed to pay bills over the course of a year.
Still, Mr. Musk told analysts in August he was “highly confident” Tesla will achieve profitability and positive cash flow in the 3rd and 4th Quarters.
A large number of investors and analysts worry that Tesla will be able to pay $1.2-B in debt that comes due over the next 4 months. Failure to meet Mr. Musk’s Q-3 cash and profit goals will deepen the doubts.
There are tricks Mr. Musk can do to artificially boost the bottom line, but such things will not be sustainable. That said I doubtful that Tesla will reach profitability in Q-3.
Analysts’ earnings forecasts vary: the 14 estimates tracked by FactSet range from a 1.75 EPA loss to an 88c EPS profit in Q-3. Cash flow and cash on hand are more important for Tesla now.
The company declined requests to provide an executive who could speak about cash flow issues.
Tesla is no longer an investment grade growth stock, it is a speculation play for professionals, Caution!
|NASDAQ:TSLA||260||19 October 2018||-3.91||267.39||269.66||253.5||9,375,500|
|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Bearish (-0.27)||Neutral (-0.11)||Bearish (-0.31)||Bearish (-0.38)|
Have a terrific week