Tesla (Nasdaq: TSLA) reported Q1 earnings that exceeded estimates across multiple metrics and sent shares more than 7% higher, after being up as much as 10% in pre-market trading. The company also made new records in terms of revenue, vehicle deliveries, and automotive margins.
Tesla's stock is up 35% from its late-February lows when it bottomed around $700. It remains off by 15% from its November 2021 highs. At its February nadir, the stock was off by 44%. In one sense, the stock has been range-bound since late 2020, trading between $700 and $1200.
Over this period, Tesla's business has certainly gained momentum as earnings are up by more than 400%, and revenues are up by more than 80%. Notably, this has been a period when many automakers have failed to produce at full capacity due to shortages of components.
Inside the Numbers
In Q1, Tesla reported $3.22 in earnings per share, topping expectations of $2.26 per share. Revenue also topped expectations at $18.8 billion vs $17.8 billion.
Automotive revenue was up 87%, reaching $16.9 billion. Gross margins also increased along with production volumes, reaching a new high of 32.9%. This has been a core thesis of the bull case in the stock - margin expansion with higher volumes. Overall, the unit had a gross profit of $5.5 billion.
Revenue growth was due to higher prices and deliveries. For the quarter, it had 310,048 deliveries with Model 3 and Model Y vehicles making up 95% of sales.
For 2022, the company is targeting 50% growth. However, it noted an adverse impact from the lockdowns in China which has put the Shanghai factory offline for about a month. Still, the company expects to produce 1.5 million cars in 2022. Due to high demand, new customers are likely to be on a waitlist for over a year.
Musk also noted that full self-driving capabilities were taking longer due to the difficulty of the task. This feature has been promised for some time, but the actual release has been delayed, although there is a beta program. Still, this is not a fully autonomous package yet.
The company noted the adverse impacts of inflation and chip shortages which were made worse by Russia's invasion of Ukraine and the pandemic in Asia. The company's inventories were low for the whole quarter, and it said that factories are operating at below full capacity. It sees these issues continuing into next year.