The GAAP net revenues claimed by the Tesla (TSLA) for Q3 were $331 million. I argued in a recent post, “Teslas stock price third-quarter results show that it still can not make any profit from selling vehicles” that profit was largely illusory because it came from regulatory loan sales instead of selling cars. As other analysts have suggested since, however, this study suffers from a lack of tax impact on net profits. Taking this critique into account, I chose a second move back to the Q3 earnings report to assess if Tesla succeeded, after all, in making a modest profit.
What after all is Q3 rentable?
It seemed at first glance that Tesla had once more fainted to make money out of its core industry of manufacturing and selling electric vehicles with regulatory loans of $397 million during the quarter, to achieve its $331 million profit. The loss of $66 million results from the removal of regulatory loan revenue from net profits. Although quite crude, Tesla’s watchers, including Seeking Alpha’s Andreas Hopf and Twitter’s TeslaCharts, used the estimates fairly widely:
However, it is clear after a closer analysis that only a deduction from net profits from regulatory credit profits does not offer a detailed image of Tesla ‘s core profitability. The key explanation for this is that it does not include the tax consequences for net income of this estimate. In the third quarter, Tesla issued a $186 million sales tax provision. In addition to the net profits reported by Tesla, we have a $517 million profit before taxes.
Core Market Situation
Regulatory credit sales can not indefinitely log Tesla ‘s issues. The arrival into the industry of hundreds of new electric cars from a variety of manufacturers would inevitably decrease the credit rating. Offering and requirement are fundamental. The number of available credits will increase with more manufacturers producing electric vehicles. Around the same time, these car manufacturers are forced to buy less credit to pay their internal combustion motor firms. So Tesla’s days of regulatory credit bonanzas were widely understood to be numerous.
Tesla’s stock price operational business would have to make the difference somewhere with the regulatory credit sector operating on borrowed time. Regrettably, the company has had issues with a huge growth expected by CEO Elon Musk and baked into its stunning market capitalisation of $400 billion.
Many of them increase their price targets by husbands – surprising dumb statements can also be found which are consistently endorsed and encouraged. Many opponents even claim that Tesla is just a vehicle corporation. Documented records still claim no appeal. If you want to invest in this stock, you can check its balance sheet at https://www.webull.com/balance-sheet/nasdaq-tsla before that.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.