Tesla Inc

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Tesla's Secret is Out: Sales Growth is Out of Control


Written by Ophir Gottlieb, 01-11-2016

Tesla just released data on its sales and backlog and Wall Street totally missed the one number that stunned everyone who was paying attention.

Tesla announced Sunday, January 3rd that it shipped 50,580 cars in 2015, hitting the lower range of its target for the year for 2015. Tesla reported total deliveries of 17,400 for the quarter, representing 78% year-over-year growth.

Wall Street hit the stock hard but the media missed everything. But this isn't the story.

I'm not sure how this goes missed, but other than a few shrewd analysts, the biggest news Tesla reported was totally overlooked. Read this carefully, because it's almost impossible to believe.

First, we know that Tesla's total revenue in the trailing-twelve-months is $3.8 billion. Here's the all-time revenue chart.

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And here's what was also reported but somehow missed by everyone just reading the headlines:

Tesla reported a backlog of 33,000 Model X reservations. That's $4 billion in order backlog.

Yes, the company has a larger backlog in one product than all of its revenue in the last year. And friends, that doesn't include the Model S, which is its best selling car (Source: Benzinga).

Read that again. The company has a backlog in its newest product that is larger than its total revenue for the year of 2015.

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If Tesla is going to be a true colossal success, the second step after selling one successful vehicle on a limited scale, is to sell a second vehicle on a larger scale. Beyond the obvious, that the Model X is now a second product, it is a bridge to the Model 3. In order for Tesla to even get to the Model 3, Tesla must drive more cash to the company with a higher volume product. As Business Insider puts it so aptly:

The Model S was a platform to prove that Tesla was for real. The Model X will be a platform to demonstrate whether the auto industry is moving toward the car of the future.
Source: Business Insider.

Further, a successful Model X will address a reasonable concern which is simply, "can Tesla create and engineer another successful design?"

We have an answer; it is, a screaming, jumping up and down: Yes!

With Ford and Google shaking hands on a partnership and GM and Lyft also making a new deal, we must ask ourselves if Tesla will go it on its own or look for a partner. Rumors are swirling of a dream team partnership with Apple, but don't let those headlines get in the way of the real thesis behind Tesla.

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Tesla has market moving news coming out on several fronts that will detach it from the broader stock market and move it into a stock that gyrates on its own news.

I. The company will give the world a preview of its Model 3 car -- this is the vehicle that is supposed to take the company from 50,000 unit sales in 2015, to 500,000 by 2020. Yes, a 1,000% sales increase in five years.

Remember, we have everything we needed from the Model X to believe that Tesla can produce a successful second vehcile. The final step is to see if the company can create a vehicle for the masses and that is the Model 3.

It's way too early to make a judgement, but if Tesla comes out in a few months and reports that Model 3 sales backlog is as overwhelming as the Model X, friends, the stock could absolutely explode. Equally, if the Model 3 is met with a thud, the stock will likely tumble as valuation calls from every brokerage on planet Earth will come out.

II. The second market moving news we will get is larger than even the first above. It is the seminal moment for Tesla as a company.

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This is the time to watch Tesla -- it could very well detach from any market noise, and trade on its own news entirely, and that is looking more and more bullish by the day.

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Headlines miss everything and the real top analysts, the ones that rarely speak publicly and serve the top 1%, are keenly aware of the deep data that will move markets and they know exactly when retail traders are selling everything they own. This is how they pick their stocks even if the market goes sideways or down.

The information asymmetry that exists between pros and non-pros has transferred massive wealth to the top 1%. That information asymmetry is no longer acceptable to us. In fact, it infuriates us.

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Thanks for reading, friends.