The 1 Thing I'd Want Elon Musk to Answer on Tesla's Oct. 21 Call
The EV maker's valuation relies on Robotaxi. But what does a paid trip earn?
Tesla's upcoming earnings call on October 21 will likely be focused on the company's profit margins, but the most crucial figure to understand the stock's value may not be disclosed. If the CEO, Elon Musk, were asked one question, it would be about the profit earned per paid Robotaxi mile after accounting for the cost of operating the vehicle.
While the company is selling more vehicles, it is retaining less profit. In Q2, revenue grew by 26% year-over-year, yet non-GAAP earnings per share fell 18% to $0.33. With just 1.4% of revenue left as operating profit, it's unlikely that even a strong quarter can justify the current stock price. Tesla expects future earnings per share to double and anticipates a higher Robotaxi fleet, but investors are paying for these expectations without per-mile data to validate them.
The company spends heavily on capital expenditures, primarily to expand the Robotaxi fleet, which could drive free cash flow to negative territory. If Musk shares a per-mile profit figure that holds up after charging, cleaning, remote support, and wear, it could provide valuable insight into the stock's potential. However, without this information, shares appear overvalued at around 165 times expected 2027 earnings.
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