Tesla... WATCH BEFORE 1pm Pacific TODAY

hey everyone kevin here let's talk about

tesla earnings today and my expectations

and plan for tesla

so tesla beat earnings six out of the

last

six earnings which is really great or at

least that sounds great but the reality

is when we look at the stock chart

it's really not that phenomenal in fact

if we go here to january

2020 yeah the stock went up after

earnings

but that was the last time we traded

mostly sideways in the april 20 earnings

we traded sideways then down in the july

20 earnings we traded sideways for about

a month in the october earnings

of 2020. then we traded sideways and

substantially down in the january 2021

earnings

traded down after the april 2021

earnings and now

what are we going to do after earnings

today well geez if the pattern says

anything

probably sideways or down and the

options market is

kind of over tesla at the moment options

volatility

for tesla has plummeted which is really

really bad if you own

call options like i do unfortunately my

tesla calls are bleeding they

have eradicated my gains on other

options that i have

like google enface or etsy all of which

have made me hundreds of thousands of

dollars so far

but unfortunately because of tesla i'm

basically at

a big fat zero so thanks tesla

and the lack of options volatility what

i really need from tesla

is some more freaking volatility can we

get some more volatility up in here okay

i need some more frantic up and down and

frantic-ness

to make some money here and this

sideways trading

boring crap is kind of bothering me it's

it's boring and it's annoying

but anyway here's the thing we got to

take our emotions out of this not that

i'm emotional at all over this

let's take our emotions out of this and

look at some numbers

in quarter one tesla delivered 184 800

vehicles

that worked out to receiving about nine

billion dollars of automotive revenue

which worked out to about forty eight

thousand seven hundred and twelve

dollars per

vehicle if we multiply forty eight

thousand seven hundred and twelve

by two hundred and one thousand two

hundred 250

vehicles delivered in this quarter we

get to about 9.8 billion

now we did deliver eight uh 1890 model

s's and x's which means we're probably

going to be able to bump this average

to around 50 000 as an average selling

price

that would get us just over 10 billion

dollars in revenue

the street right now is expecting tesla

to bring in

11.37 billion dollars in revenue

which that extra 1.3 billion dollars is

entirely possible through

energy revenues and service revenues

will probably

meet or beat the earnings i don't know

how much will beat it by

and this is where i get a little bit

concerned see right now

energy revenues and solar revenues in my

opinion are being held down by supply

chain constraints

inverters are harder to make and come by

and these are delaying solar panel

projects

and solar install projects that's not so

good tesla's energy game is also big on

the long game

and so it can take longer for us to

actually expect the energy revenues to

beat

now maybe tesla installed a bunch of new

mega packs which would be a miracle

but that also implies that tesla had

enough against supply of not just

chips but also batteries to do so we

also

don't have enough s's and x's being

delivered in q2

to really expect the average selling

price of each vehicle

to go up substantially so the reality is

this is probably

going to meet expectations and meet with

the options market is implying

in other words we'll get earnings today

we'll have milk toast earnings and it'll

be boring

and our options will continue to bleed

as options volatility continues to sink

this is really unfortunate and it

somewhat implies that the momentum for

tesla is gone at least the

volatility momentum now i am a tesla

bull

but i realize sometimes patience

is really what's needed for stocks but

it really sucks when you're in options

and that's one of the biggest downsides

of options is

patience costs you a lot of money theta

decay

is a disaster and it is very very

expensive

so here's what's on my mind

today is the first time i've seriously

considered selling call options against

tesla

to take advantage of whatever kind of

improved volatility we would have today

that way if tesla meets or goes down

i'm good i locked in some attendees by

selling some calls

and if there's a beat hey no worries i

hedged myself

and i had a little bit less profit

because i still have my calls

but when i woke up this morning and i

looked at tesla's volatility

it was milk toast like we got no

improvement in volatility

so really the best case scenario that

could happen here with tesla

and this is a very crucial point is for

tesla to just

magically come out with some kind of

insane beat

by maybe crushing margin way better than

it ever has in the past

and all of a sudden wall street is like

oh my gosh they got

their efficiency down so pat that they

are making

so much money this changes all of our

algorithms in the future

and all of a sudden tesla shoots like 10

15 that's going to change the volatility

it measures

that's going to help bail people out of

options who have call options

we need a big freaking beat now we're

not going to get it on average selling

price

and i don't expect we're going to get it

on energy the only place and you've

heard me say it before on this channel

especially if you're a subscriber here

the only place in my opinion we could

see it is in margin

which what's really interesting is wall

street right now

is expecting margin to come in the wall

street consensus

is for it to come in at 26.03 percent

which is actually less than previously

uh in q1 we had 26.5 percent take out

the regulatory credits you're at 22

now i personally think we could easily

get back to that 27.7 percent level

from q3 2020 and one of the reasons we

saw such a big bump over here

is because once we saw covet expenses go

away

then we started seeing margin bump up

again

which is very good we want to get back

on that trend of seeing covet expenses

go away we're spending less on the

plexiglass and the filtration on masks

on sick time

whatever and we start seeing that margin

go up in the direction it should be

going up

if we actually extrapolated our 2019 and

2020

margin improvements we should

realistically be closer to 28

gross margin using the vehicle credits

as well and

elon musk's goal is to get this to 30

not including vehicle credits if we get

a

massive margin beat in this quarter

it's going to in my opinion set tesla up

for a wonderful q3 q4

it's going to hopefully lead to a big

move in the stock price maybe we'll see

another two or three week rally on tesla

and we'll finally be able to bail out of

option contracts that we have purchased

and once we get to peak euphoria then we

can sell calls

and take big freaking attendees to the

bank

but short of a big margin beat i'm very

worried

that this earnings

day is going to be milk toast and it's

going to suck

because it's just going to bleed our our

call options even more

so we'll see what happens fingers

crossed on a big marginal improvement

for tesla

honestly right now not holding my breath

but i've got my fingers crossed and i

really hope we be

folks thank you so much for watching we

need not just a little beat but we need

a big beat on margin

watch me live when i cover the tesla

earnings later and folks we'll see you

next one

[Music]

you