Tesla, Inc.'s Q1 earnings beat lifts margins and FSD services, but TSLA valuation remains stretched with inventory risks. Click for this TSLA stock update.
Summary
- Tesla, Inc. delivered a double beat in Q1, with revenues and profits exceeding Wall Street expectations, driving a positive immediate market reaction.
- TSLA's gross margin improved significantly to 21.1%, aided by higher average selling prices and robust growth in its services business, especially FSD subscriptions.
- Despite operational improvements, TSLA trades at an extremely elevated valuation, with free cash flow yield at 0.4% and adjusted earnings multiples near 250x.
- I remain bearish on TSLA due to its lofty valuation, inventory build-up, and reliance on unproven future businesses, seeing more downside risk than upside.
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Marvin Samuel Tolentino Pineda/iStock Editorial via Getty Images
Article Thesis
Tesla, Inc. (TSLA) reported its fiscal Q1 earnings results on Wednesday, beating estimates on both lines, which was a positive surprise. Still, Tesla continues to battle with relatively weak
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