Watch BEFORE Tomorrow: *Critical* Tesla Earnings PREVIEW

Earnings are less than 24 hours away.

Here's everything that you need to know

that's going on going into these

earnings, especially this latest news

regarding the Giga Casting leak, the

company update, which is unique. You

don't usually get this on earnings call

and earnings estimates as well as

historic volatility. Why don't we start

with historic volatility? I have it up.

I have it handy. Here's the thing. V is

elevated. Uh volatility has been

elevated since Liberation Day and the

tariff announcement. pretty much all of

April. We have the highest volatility on

the stock that we've had in the last 12

months. Now, the reason I bring that up

is because it's really good if you want

to sell options. Selling options is

going to give you a bigger premium right

now. So, if you're bullish, you might be

interested in selling puts. If you're

bearish, you might be interested in

selling calls, assuming you have some

underlying positions. But if I look at

the last historic 10day volatility,

10day volatility right now is the

highest since COVID the summer of 2020,

which is crazy. Uh if I go to 5day

volatility, uh we we are elevated, but

we start falling a little bit more into

the range of where things have been. So

I would expect after tomorrow we'll get

some big movements again. Uh but on that

10day historic, we've got some high

volatility. So in other words, options

pricing could be a little rich if that's

what you're looking for. Uh however,

when we look at uh the the implied 1day

move, it's only 7.9% and usually the

stock moves

11.26% after earnings. So there could be

a sign that there's been a little bit of

a cooling down over just the last 24ish

hours. That said, tomorrow is earnings

day after the bell. Right now we've got

33 buy targets on the street, 15 holds,

13 sells. The average price target uh

for the uh stock is

$313 right now. For adjusted EPS, we're

looking at 44 cents tomorrow. That's the

Wall Street estimate. And for adjusted

GAP, we're looking at 33 with revenue at

21.4 billion and a net of $ 1.56

billion. So those are some of the

numbers going into this. Now, we already

have, in my opinion, a lot of bad news

data out of the way. That's mostly

because why? Well, we already know how

many deliveries we have. So, that's not

really a big secret here. We know that

we are down 13% year-over-year on

deliveries. We delivered

336,681 versus the

362615 produced. So, we expanded our

production a little bit more than our

deliveries. And as a result of this,

Wells Fargo sees gross margin X credits

down to 12.8%. because they think that,

you know, hey, the refreshed Model Y

might not be having the greatest demand

and the Cybertruck demand might be

fading, so some of the higher margin

vehicles might be seeing some fade.

While at the same time, we've done some

aggressive financing uh and lease

options for the vehicles to sort of move

inventory along. So, I'm not entirely

sure that we should expect tomorrow

anything really exciting given that we

already have vehicle data in the way of

margins.

Now, what is exciting tomorrow is what

the stock mover would be in my opinion.

And so, here's the thing. I would argue

that most people who are either holding

or buying Tesla right now already

understand that yes, Elon being involved

with a political position is going to

cause some brand damage. And I think a

lot of holders are going to see that as

yes, A, it exists, but it's going to be

temporary. and B, it provides a buy the

dip opportunity on the future value of

the Tesla technology that because of the

shenanigans, you're potentially able to

get a at a discount. Now, that is that's

exciting for a lot of folks. Uh, and so

a lot of people see that as an

opportunity and think that this company

update we get tomorrow is actually going

to enhance some of the enthusiasm around

just this. So, what could this company

update be tomorrow? And what am I even

talking about? Why is this so unique?

All right. So, in order to understand

why this is so unique is first look at

some of the earnings call updates. So,

these are the press releases for the

earnings call. Here's Q1 uh which is the

current one. But look at these two

first. Uh here's Q1 of 2024 and here's

Q3 of 2024 just to give you a couple

examples. What date of Tesla quarterly

financial results and Q&A webcast. Same

thing over here. Date of Tesla financial

results and Q&A webcast. that has now

been updated to say Tesla financial

results and company update webcast. So

rather than saying Q&A webcast, it says

company update website. This is unique

because usually Elon says that earnings

days are not the days like earnings

calls are not the time for company

announcements. Those should be reserved

for separate days. Now, conveniently,

right before this information has been

coming out, like sort of this this uh

press release was updated or sort of

right as people started talking about

this company update, we started getting

leaked images. Not really leaked. I

mean, Tesla knows this. Okay, this is

strategic. Tesla knows people fly drones

over the u uh gigafactories and they

provide updates. So, they know this and

so what do they do? They typically put

on a show, right? This is very normal,

very very reasonable. And so there are

these these images that have come out of

a potentially new casting. So uh people

are seeing what appears to be a uh a set

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below that appear to be labeled RTX

which could stand for robo taxi Texas or

potentially even robo taxi San

Francisco. There are some suggesting

that we might see uh that essentially

being related to the Fremont factory.

Right. People are taking these images.

They're uploading them into things like

GPT, which I actually thought was very

interesting. Here you see some visual

clues about why it's matter, why it

matters. This seems to be a smaller

casting than the Model Y, which would

point to some form of single motor

platform using a structural battery

pack. In other words, uh not the Model

Y, not the Cybertruck, not the Model Y

Juniper, but maybe the next generation

vehicle. Obviously, a lot of people are

really really thinking that this is

going to be Robo Taxi, and it would make

sense that there's going to be some form

of enthusiasm in the form of a company

update around Robo Taxi tomorrow. Now,

we already know that Robo Taxis have

been produced before because we saw them

at the Roboaxi 1010 event. So, we know

Tesla has already manufactured them once

before. So this doesn't necessarily mean

much in my opinion in terms of the

progression beyond okay let's get a

little bit more progress on mass scaling

the robo taxis but to me that's a little

bit more of a signal of hey look see

we're working on it than it is a signal

of hey by the way robo taxis are

actually here and working now I'm not

saying that to be a bear I'm just saying

that look here's some more of the uh RTX

uh photos. Just wanted to show that up

on screen. I'm saying that more of a way

to say, hey, if the company update

tomorrow is about robo taxi, I think

what matters more than making the

castings is actually giving us a real

road map for what to expect when it

comes to the release of Robo Taxi. Not

only the mass release of Roboaxi for

users, but also how are we doing in

Austin, Texas? How are we doing with

actually getting on the road this

summer, June or July, with robo taxis?

That's critical. Now, again, I think

these these images here are very cool. I

I love the, you know, credit to the

folks whose names I've got up from X. I

think these are great uh conclusions

about how potentially you could overlay

these castings with where the battery

management system could go, where

inductive charging could go, uh

whatever. Right? I think these things

are great. Uh, a lot of people have been

commenting that they're not completely

finished yet, that they still have some

of the flared pieces and they still need

to be trimmed down. That's fine. It

wouldn't surprise me again that in to

sort of justify their effort of what

they're going to announce tomorrow, they

rolled these out into the lot on purpose

and they're like, "Hey, you know, go do

a drone flyby. We put something out

there for you." mostly because they've

even got I don't know if I can

conveniently find an image of one right

now, but they've got images of uh of

containers with with no roof. So, to me,

it's just sort of like a please look at

us. And again, the vehicle has been

manufactured before. We know it's been

manufactured before, so we know the

castings are likely present and the

prototypes for the castings are likely

present. Again, good to see more of

them, right? But I think seeing more of

them isn't necessarily a signal of

anything that we necessarily need right

now. What we need is confidence that

we're actually going to have these as

self-driving vehicles sooner rather than

later. Okay, now that's my opinion that

out of the way, let me quickly do uh a

little bit of PEG analysis and then I

want to touch on some other updates

here. So as far as PEG for the rest of

the year, we are expecting $2.64 of

earnings. That would be for the 12

months ending December 31st, 2025. At a

current price of 227 divided by 2.64,

we're sitting at about 86 times

earnings. So, in other words, Tesla's

value, you know, valuation has

compressed substantially from those

higher three or $400 levels, which is

great because we're still expecting Wall

Street growth of around 32%. Which means

Tesla's only selling for about a 2.68

peg, which is actually really kind of

good depending on how you value them. I

usually value Tesla as a manufacturing

company, which gives me about a 1.69. 69

peg, but Tesla by the market is being

valued as a software company, which

makes sense and I'm totally willing to

switch to that as we start seeing more

revenues. And that's why I'm telling you

there are two pegs you want to look at

here. 2.69 is usually what you use for a

designer of software like Nvidia for

example, which is selling for way lower

than that right now. That's a huge

discount right now. But one of the

things we talk about is this idea that

at 269 you're selling FSD, you're

selling Optimus, and you're selling the

software suites around that. You're

selling the technology and the AI around

that could be a reasonable valuation.

Which means at 86 times divided by 32%

growth expected on EPS over the next

four years per Wall Street, it's

actually reasonably valued as a software

play. Now, if you only go as a

manufacturing play, which I do think is

somewhat of a disservice given that you

still also have other things to

manufacture. The semi-truck, I don't

think that's being priced in. Uh the

energy division, most people ignore

that. And and honestly, that's probably

going to be one of the most profitable

divisions, though a lot of it relies on

batteries. Um if you only value it as a

manufacturing company, 169 times uh the

uh 32% growth times 2.64 64 for the end

of the year, you'd only get to about

$142 of stock value. So really, it's the

difference between 142 and the 227.

That's what you're paying for Optimus

and FSD and Robo Taxi. Now, if things go

bad tomorrow after earnings and the

stock goes down to 142, just as an

example, you are paying 0 for Optimus

and Robo Taxi. And obviously, I would

expect that dip would be heavily bought.

I don't actually think it's going to

fall that much. I'm just saying that

that's a reasonable way to potentially

look at ah okay so you know what is the

market pricing in uh okay good so uh

with that now what we've got to think

about is uh the charging infrastructure

side yes China is competing heavily with

Tesla on the infrastructure side uh I

don't know how much of a direct issue

this is but unfortunately with these

Trump tariffs one thing that nobody's

really talking about is we're not

getting the latest and greatest

technology ology from Chinese companies.

Uh, hold on one

sec. Uh, okay. We're not getting the

latest technology from Chinese companies

because of all these tariffs. CL, for

example, just unveiled a new battery

that charges as fast as they say pumping

gas. We've heard this talk from BYD as

well, the 5minute quick charge. A lot of

people here in America say, "Oh, well

that just blows up your battery." The

reality is, yes, it could lower the

lifespan of batteries, but a lot of

Chinese charging infrastructure uh and

these quick charge batteries use an

800vt infrastructure. And one of the

reasons they've been able to pull that

off is because China has uh basically

two state-run companies that do all the

charging infrastructure. And so you have

this really coordinated buildout of EV

chargers. uh China for example in the uh

of five years of 2019 to 2024 added 3

million public EV chargers. The US added

about 120,000. So when we hear about

these upgrades of charging

infrastructure and we hear how many

units China is adding, China's doing way

better at expanding charging

infrastructure. So it actually makes it

easier to expand in China. Now, Teslas

are also being sold in in China, but

they have a lot more competition there,

whereas we have less here, and we're not

really building out that EV

infrastructure as well as we should be.

Now, Biden had announced, you know, $635

million of additional grants for EV

infrastructure on January 10th, right

before the inauguration. That was in

addition to money he had previously

allocated, but was really slow to get

moving for a couple years, which was

really dumb politics. Uh but on February

7th, Trump paused all $3 billion of that

EV spending on behalf of the government.

So don't expect too much support for

extra EV chargers in the United States.

At the same time, the tariff war is

driving Chinese cars to Europe because

the EU, European Union, might now

actually lift tariffs on Chinese cars as

long as they promise to have a floor on

the prices that they import to Europe.

This has already led China's market

share to move up from 2.8% 8% in Europe

in 2024 to

4.1%. And so far, our Tesla and BMW

price cuts, if you lump them together,

haven't really been helping. Sales of

both of these, the Tesla and BMWs are

down 15% from their 2019 peak. The

reason we're combining that is just to

sort of get a feel for what's going on

in the European economy, and it's quite

recessionary. That's why the ECB is

cutting so much. Uh now another thing to

look at from a tariff point of view is

Tesla insurance could get hit slightly

from tariffs as well as obviously Tesla

battery imports and it depends where

exactly we're going to be getting all of

the parts. Tesla's been a little less

transparent on some of their new battery

mixtures in terms of where they're all

coming from. So TBD we're going to be

looking for some of this in the earnings

call. But I would argue the most

important thing tomorrow is excitement

over robo taxis. There are also rumors

about potentially like Tesla sh Tesla

doing some sort of share sale to make an

X AI investment to get access to some of

their data centers. I don't know if

that's going to happen. That that seems

pretty far-fetched. I think much more

likely is going to be some form of

update on the robo taxis. And so if we

get what we want, which are updates on

full self-driving and robo taxis, that's

going to be great for the stock. If we

don't, it's going to be bad. that in

terms of like the actual revenue numbers

right now. True investors in Tesla right

now aren't worried about the current

deliveries. We they realize Tesla's

going through a hard time right now and

as rates come down and we get through

the whole Doge thing, you know, who

knows? Maybe we'll get an update that

Elon Musk is going to walk away from

Doge and, you know, by the end of the

quarter. Maybe we'll get an update about

like some of the auto park features that

were promised in Q4 but haven't shown up

yet, especially like curb to drop off to

park or curb drop off to park, garage

parking, driveway parking, blah blah

blah. Uh, and and you know, and so far

all this talk about more affordable

models has really been just more

affordable Model 3s and more affordable

Cybert trucks, not new models. But we've

already been talking about that, you

know, not only in my course member live

streams, but also just publicly on the

channel. I've been saying for over a

year now that the only thing that I

think they're going to do with a more

affordable model is cheaper existing

cars. And we saw this, we saw this

debate between executives and Musk

through what was reported by the

information, uh, we kind of already knew

this that other executives at Tesla were

pushing cheaper models and new models

like a Model 2, but Elon killed that

because he wants robo taxis. And this is

why so much more is relying on this

company update we get tomorrow. We need

to know what's happening. Like are we

going to have robo taxis this year or

not? That is make or break. If we get

like a big delay on robo taxis or some

sort some form of bad news on robo

taxis, it's going to be really bad for

the stock tomorrow. And if we get really

good updates, the stock could rally. And

I actually I know obviously Optimus is

going to be interesting as well, but I

think less important right now than robo

taxes. Yes, there will be hope on

Optimus, but that's still years away.

The critical time frame for Tesla is

now. Anyway, thanks for watching.

Consider subscribing. We'll see you in

the next one. Goodbye and goodbye. Why

not advertise these things that you told

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advertising and see how it goes.

Congratulations, man. You have done so

much. People love you. People look up to

you. Kevin Praath there, financial

analyst and YouTuber. Meet Kevin. Always

great to get your take.