10/25/2023
Tesla's Rare Double Miss: Analyst Expects Wall Street To Revise Estimates After Q3 Earnings Call Earns 'Not Good' To 'Terrible' Reviews
Electric vehicle giant Tesla, Inc. (NASDAQ:TSLA), reported its first double miss in over four years, resulting in a lackluster response from investors. The stock plummeted by over 5% in after-hours trading.
Tesla investor and Future Fund’s Managing Partner, Gary Black, took to the social media platform X (formerly Twitter) to share his perspective on the results.
Black Analyzes Q3
In the third quarter, Tesla reported adjusted earnings per share of $0.66, which fell short of the consensus estimate. The auto gross margin, excluding regulatory credits, was at 16.3%, below the expected 17.7%, as noted by Black. It’s worth noting that Tesla represents the second-largest holding in Future Fund’s flagship The Future Fund Active ETF (NYSE:FFND) exchange-traded fund.
Black also expressed concerns about the quality of Tesla’s earnings, mentioning that regulatory credits came in at $554 million, significantly higher than the expected $341 million. Moreover, the third-quarter tax rate was 8.2%, lower than the anticipated 11.9% rate according to analysts’ expectations.
Regarding other metrics, Black highlighted that the cost of goods sold dropped by 4.8%, the average selling price (excluding regulatory credits) decreased by 18.1%, and free cash flow fell short, ...
Tesla's revenue fell short of expectations, marking the first time both headline numbers missed estimates since the second quarter of 2019.
