the morning after... my honest take

okay so what do we make of a Tesla well in this video I'm going to start by showing you an interview uh that I just did with Yahoo finance to give you my reaction after being able to uh digest what happened with Tesla over the last 24 hours I want to give a heads up I I think Elon did a fantastic job he gave a lot of Hope when sentiment was at bottom and that's very exciting and it's optimistic the future is so great for Tesla I love Tesla and I I believe in EVs and and energy and solar I believe in all of that I I'm not sure and I'm conflicted though on the path and the actual Clarity that we got for the next year 2 3 four 5 years I I still think the next 5 years have tremendous uncertainty and you're going to see why in this interview uh and then we'll come back at the end of the interview and I'll give you some additional thoughts quick note check out this video clip from our how oack Road Show in San Jose it's amazing we had such a great turnout in the venture capital capital of the world is so freaking cool and if you want to come to the road shows remember house act.com 2024 investment deadline is May first details and subscription agreement are over there read the paperwork house 2024 well Tesla out with first quarter results clocking its first Revenue drop in four years the EV maker reported both a revenue and earnings Miss but the stock is soaring today after the company said it would accelerate the launch of more affordable Vehicles despite today's pop the stock right now down over 30% this year and it's becoming popular in the options Market Tesla short interest is up 30% from the beginning of the year here with more we've got Kevin paath who is known as well as the popular YouTuber meet Kevin and a long-standing Tesla retail shareholder as well uh if if my memory distes me correctly as of uh this morning you've also trimmed your position recently take us into that decision making Kevin yeah absolutely thank you so much for having me by the way so uh what I did before earnings and before we got our q1 deliveries numbers is I thought this would be a perfect time to tax loss Harvest some of those higher Acquisitions of Tesla shares so I sold down in March up to uh the earnings uh which we just had yesterday uh and so now the debate is is it time to Reby Tesla and I think investors should be looking at three good things that we heard from Tesla and five bad and I'll keep it short I'll go through them quickly margins up in the face of price Cuts amazing even with credits removed this was a really good positive shocker they've clearly got efficiency in manufacturing and that's the reason you want to invest in Tesla big fan of that uh so we like that good we got a very hope-filled Elon which was also very good and we have the hope of new vehicle models coming whether we actually get new models or they're just refreshes we'll see but there was some bad and so we kind of have to weigh the good and the bad here one we just added basically nine lifts to our valuation the riot haling company lift we added nine of them to our valuation overnight so I think we might be adding a little too much hope there we've got the risk of the share comp plan for Elon Musk is he going to get paid if he doesn't get paid is he going to end up taking the Optimus uh robot uh the the humanoid robot somewhere else we've got the negative cash flow risk with the AI Investments that's why we're no longer building new gigafactories Giga Mexico is basically on hold and we basically just took away the hope that the 4680 battery cells are truly the next greatest Innovation which is the same thing Elon did with Dojo that hey we're doing our own servers but now we're going to use Nvidia chips hey we're doing our own batteries ah we're just going to use cheaper Chinese Chips so they're pros and cons here and I'm sitting here wondering is it time to Reby and I just haven't figured it out yet is a more affordable soon to be announced or unveiled or uncloaked vehicle that they talked about on the earnings call is that a pro or Con in your perspective it's a pro if we can actually get a new model but they purposefully dodged that answer in the earnings call leaving the door open to the possibility that more efficient vehicles are just versions of the model 3 and Y that are manufactured in a different way so for example a steer by wire on a Model 3 or Y uh or using a 48 volt architecture to sort of bring down some of those costs without actually introducing a new model and so investors sort of have to evalue okay are we going to get new models that are going to get us to vehicle growth or do we just forget vehicle growth for a moment and just hope that full self-driving is actually going to produce the revenue we think it might keep in mind right now we've got a take rate of about 10% it'd be nice to see that around 20 30% but will the cost of FSD come down to offset some of those gains those are some of the other things to value now I just want to be clear I love full self-driving and I think in the future everybody's going to use full self-driving but we might be a few years away from Robo taxi so pricing that in also hard and that's why when I look I go oh wow up 12% it's still lower than where I sold my shares I sold some shares between uh about 71 175 so I could still buying at a discount but I'm sitting here wondering we really that close to full self-driving yet to start pricing this in in in other words full autonomy I'm not convinced of that yet what's the dial mover that would tell you it's time to get back into the name I think we've got all of 2024 to set an EPS floor and so there's plenty of time to buy in my opinion and then the dial mover is vehicle growth again where we actually get back to going from 1.8 million vehic vehicles to 25 to three to 35 to four 5 million Vehicles that's the growth we need because the more Vehicles we get on the road the more Tesla can make from Full self-driving the more data we have to increase that moat for robo taxis the more potential Robo taxis we can have on the road the more cash flow positive cash flow they have with good margins to invest in other initiatives like the Optimus my concern is with this negative cash flow we're facing now we're really cutting out other initiatives and I suspect that a lot of them are going to take the back burner they're suggesting that they're starting production of the uh Factory to build the semi truck but they've said that for five years and they showed us a picture of a graded lot but as someone from a real estate world I know that we grade Lots just to keep the weeds in the city away so I have I have a lot of skepticisms and I have a lot of hope I'm just not sure how much I could value that hope at right now Hey Kevin uh just lastly while we have you and I would have loved to ask a question about the cybertruck I actually need to Pivot here because of some breaking news that came out during this hour from the Biden Administration that that may influence uh you or many of your colleagues as well in the kind of influencer uh and content creator category also uh where there's going to be more of the perhaps onus on a potential buyer to come forward and buy Tik Tok or else it will not be allowed to exist here in the US and a US US owner specifically I should mention as well what what do you think that does for a lot of the content creators like yourselves or and where do you shift to if not on Tik Tok I would be surprised if somebody didn't come around to buy it because quite frankly if Tik Tok was going to get 100% shut down you could take the value of Tik Tok in America and just set it to zero so anything above zero is going to be a win for bite dance and quite frankly I'm sure they have plenty of friends with American passports who could buy this company and pretend to be different do I really think it'll become truly fully independent probably not uh will it get bought up very likely as a Creator uh it's definitely an uncertain time because there's always that chance that it just it's completely gone and and and removed from the App Store and even just a period of time this is the biggest risk even if it just disappears for a few months as soon as people get the routine of using that kind of platform out of their habit of opening their phone every time they go to the bathroom or they're in the kitchen to get a coffee or whatever as soon as that routin turns into okay now they're on YouTube shorts or they're on Instagram or something else that definitely hurts creators on Tik Tok so the worst case scenario I don't think is that they're gone forever it's just that if they're gone for a window that unwinds people's habits and that's the worst thing that could happen Kevin really insightful thanks so much for the time really appreciate it Kevin pathra who you can catch on YouTube meet Kevin of course and financial analyst appreciate it thanks for having me so what did I think well it was knowing that I have had no cough all day long and I've been live for like 2 hours and then of course right when I get on Yahoo finance I all of a sudden have some weird cough it's like it's it's the the record dilemma the live dilemma but that's okay so what do I think well I I I I don't know I think that the broader economy while we're holding up with earnings so far and I'm very optimistic about we're holding up how we're holding up with earnings uh I still face a problem uh and that is this problem it is a topping problem of the volatile Nike Swoosh and I think there's still potential for good volatility ahead of us thanks to the pain of drum pow now I thought Elon Musk would have discussed drum pow yesterday and we didn't get any jpow talk if we have a second wave of inflation all bets are off for everything it doesn't matter how many lifts we add and and I'm not trying to be offensive to Tesla to say it's only because of you know the ride hailing service that Tesla's up that's not the argument it's just to say that we added about $60 billion to Tesla's valuation yesterday Lyft which is a ride healing service only has a$6 half billion doll market cap you know Uber's obviously way larger but the point is like you add another lift yay cool there's a there's a ride healing server if it's not fully autonomous is it worth more than a lift is it worth nine lifts is it worth two lifts three lifts or is it worth you know 20% of a lift I don't don't know uh I I don't I certainly don't think that just because we created some mockups we're automatically worth what at least the lift is worth or you know a third or a fourth uh that's actually what is it uh 60 divided by about 150 that would be about uh 40% 40% of uber right uh is it worth having added that and I don't think fully the stock price move here is solely because of this I think it's quite frankly a return of sentiment you had Elon the great cheerleader for Tesla finally tell us look we're going to keep doing what we do well we're going to focus on engineering efficiency manufacturing efficiency uh and using that to introduce uh new models whether those are refreshes or completely new models we don't know but new products that we hope can bring us to 3 million vehicles of sales three Mill 3 million vehicles of sales would be great but we also don't know over what time frame that's another issue they didn't tell us when 3 million units if I go 3 million 2026 that's great that props my numbers a lot but some of the things that to consider compared to the spreadsheet and I was thinking about this a little bit yesterday we might not actually get to that 3 million figure by 2026 this is why we created various different scenarios here and quite frankly they're incorporating their FSD Revenue recognition into their margin so you're you're increasing margin by a percent or two because of FSD Revenue recognition so if I kill FSD Revenue recognition and I say that's what's going to let me maintain like having FSD Revenue recognition will let me maintain an 8 18% margin and uh I now go throw in cap X which I'm going to have to go in here and throw in cap X of about a billy so let me go kill these as a percentage of FSD and just throw in a billion dollars annually keep in mind we'll have $85,000 h100s but those are going to be old right you're going to have new Chips you're going to have to continually invest in to keep getting to the latest and greatest levels of of autonomy and better Perfection and smoother rides and better comfort for users it's just going to continuously get better and better and better and I'm very optimistic about it but I'm going to throw in a billies over here and so if I do that if I give him a 30% EPS growth rate yes I can justify getting to uh 2011 maybe even 275 depending on how many deliveries we get at a 30% pay which the sucker selling for you know 161 right now so that gives me you know an 8 to 20% compounded rate of return which is great but if I get my EPS growth that only ends up sitting at around 20% well you know in two of these cases my share price is actually lower so I don't know that we really got the clear color to say oh yeah we're going to go back to EPS growth we did get Elon suggesting that we should be able to beat 1.8 million vehicle deliveries this year which we had in 2023 but I think you're comparing to a hard year and I think you've realistically got probably all year to to sort of take your time and evaluate see what's going on of course if the economy just keeps booming great but remember we're up against you know at least Market relative near all-time highs so I'm I'm conflicted uh that's the way I look at it again I could just declare Victory Buy in right now I could go look everybody I save $10 a share and I tax loss Harvest win win win could just declare Victory uh but that would be dishonest to the confliction that I still have so I'm evaluating uh how my my thesis uh really Nets out and uh that's sort of the process that I'm in right now but these are just some of my honest transparent thoughts about how I feel uh you know the next the morning after so to speak anyway hopefully this is useful to you let me know what you think in the comments down below and um as we sort of expected the we've got lots of uh lots of haters on the internet that are retweeting my uh uh dear Elon Musk please just cancel the earnings call uh tweet I I don't understand this I think I think people like to just get out of the way although we did suspect that people would do this but they kind of fell into our trap so to speak of uh just appearing like a hater but if you remember yesterday the stock was up like 8 or 9% before the earnings call and we were joking live we joked about this all recorded live we were like hey cancel earnings call will take the 9% because historically the stock goes down during the earnings calls right this was great Elon performed really well on the earnings call so of course it's easy then after the earnings call when it moves up another 3 or 4% for you know Omar come on Omar you know better than this but again this this gets likes this gets engagement people like oh yeah I don't like Kevin either it's like well when you mis contextualize someone uh it's just it's just rude and uh uh and um sad honestly it's sad it lacks logic uh I sorry dude but come on you know SMR reposting without comment winky face you know again and so you have the luxury of posting that uh you know three and a half hours after the earnings call ends thank you uh Thanks for for for that that's that's all I'll say all right we'll see you why not advertise these things that you told us here I feel like nobody else knows about this we'll we'll try a little advertising and see how it Go congratulations man you have done so much people love you people look up to you Kevin PA there financial analyst and YouTuber meet Kevin always great to get your take even though I'm a licensed financial adviser licensed real estate broker and becoming a stock broker this video is not personalized advice for you it is not tax legal or otherwise personalized advice tailored to you this video provides generalized perspective information and commentary any third party content I show shall not be deemed endorsed by me this video is not and shall never be deemed reasonably sufficient information for the purposes of evaluating a security or investment decision any links or promoted products are either paid affiliations or products or Services we may benefit from I also personally operate an actively managed ETF I may personally hold or otherwise hold long or short positions in various Securities potentially including those mentioned in this video however I have no relationship to any issuer other than house act nor am I presently acting as a market maker make sure if you're considering investing in house Haack to always read the PPM at house.com

Channel: Meet Kevin

Views: 59,944

Keywords: tesla, tesla stock, elon musk

Id: fUAWdp52cRs

Length: 17min 9sec (1029 seconds)

Published: Wed Apr 24 2024