Tesla (TSLA) will report second quarter results in a Shareholder Letter on its website soon after the bell and host a call at 17:30. 

Analysts expect Q2 adjusted EPS of ($2.82) vs. ($1.33 last year) with revenue up 41% to $3.93 bln. 

Q2 production totaled 53,339 vehicles, a 55% increase from Q1, making it the most productive quarter in Tesla history by far. For the first time, Model 3 production (28,578) exceeded combined Model S and X production (24,761).

Tesla expects to increase production to 6,000 Model 3s per week by late August. 

Perhaps most importantly, Tesla reaffirmed guidance for positive GAAP net income and cash flow in Q3 and Q4, despite negative headwinds from a weak USD and likely higher tariffs for vehicles imported into China as well as components procured from China. 

Analysts expect the GAAP net loss to narrow to ($3.67) in Q3 and ($0.39) in Q4. 

The remaining net Model 3 reservations count at the end of Q2 still stood at roughly 420,000 after having delivered 28,386 Model 3 vehicles to date. 

Both orders and deliveries for Model S and X were higher in Q2 than a year ago. Their overall target for 100,000 Model S and Model X deliveries in 2018 is unchanged. 

The GAAP profitability and positive FCF guidance, if attained, would put a serious ding in the bear thesis. 

Elon musk's recent erratic behavior has also intrigued bears. On the first quarter earnings call, Elon Musk went to Twitter to take questions from retail investors after getting frustrated with ‘boring' questions from sell-side analysts. He continues to taunt short sellers on Twitter.

Tesla announced plans to open a Gigafactory in China and reports indicate the company is in talks to do the same in either Germany or the Netherlands. 

Tesla plans to invest in the Model Y crossover mass market car next year. A new roadster and semi following that will all require more capital. 

With a $53 billion market cap, the stock trades at just over 3x sales or 45x EBITDA as it loses ~1$ bln per quarter. GM trades at $54 bln or 1x sales, 7x EBITDA and expects to report $10 billin in profit this year. The valuation incorporates further disruption in the transportation market.

THIS is the mother of battleground stocks: 34.7 million shares (26% of the float) is sold short. Sentiment is so poor that avoiding any terrible news could cause a short squeeze.

The stock is just below its major moving averages on the daily chart and rstraddling the important $300 level ahead of the report.

RESULTS: 

  • Reports Q2 (Jun) loss of $3.06 per share, $0.24 worse than the Capital IQ Consensus of ($2.82); revenues rose 43.5% year/year to $4 bln vs the $3.93 bln Capital IQ Consensus. 
  • "still expect to achieve GAAP profitability in Q3 and Q4. Going forward, we believe Tesla can achieve sustained quarterly profits, absent a severe force majeure or economic downturn, while continuing to grow at a rapid pace. We expect to generate positive cash including operating cash flows and capital expenditures, as well as the normal inflow of cash received from non-recourse financing activities on leased vehicles and solar products. We have significantly cut back on our capex projections as a result of our revised strategy to grow capacity with our existing Model 3 lines rather than adding all new lines. Our total 2018 capex is expected to be slightly below $2.5 billion, which is significantly below the total 2017 level of $3.4 billion. Ultimately, our capital expenditure guidance will develop in line with Model 3 production and profitability. We will be able to adjust our capital expenditures depending on our operating cash generation." $2.2B of cash and cash equivalents at Q2-end, expected to grow in Q3 and Q4."