Tesla Motors Inc TSLA recently reported a Q1 net income loss of $75 million. While the company continues to operate in the red, the Q1 loss was relatively modest compared to Q1 2015’s net income loss of $282 million.
Tesla, which has demonstrated spectacular revenue growth but has a sky-high stock valuation, is a polarizing topic on Wall Street. The Reddit community has been buzzing about the Q1 Tesla loss.
“If you look at a short term and long term liquidity analysis it’s all red flags,” one Reddit poster wrote of Tesla’s business. “Meanwhile there’s lots of companies that actually create value instead of destroying it.”
Another poster argued that Tesla’s reinvestment in its business makes it a unique case.
“I think it creates value for the 400K people who signed up for their first electric car,” the poster wrote. “R/investing just isn’t used to a company re-investing in infrastructure. They prefer financial gymnastics to build ‘value’ from murdering long term growth initiatives.”
Several posters believe that Tesla’s path to profitability will come via its massive 5.8 million square foot Gigafactory.
Others are not convinced.
“Am I crazy to think a lot could go wrong between now and the Gigafactory ramping up to full manufacturing capacity?” one poster asked rhetorically.
“Battery tech will power everything going forward,” another argued. “They have warehouses using it and personal houses… If every new building commercial and residential along with all new vehicles uses batteries… Boom $$$$$.”
In the past month, Tesla's stock is down 16.97 percent.
Disclosure: The author holds no position in the stocks mentioned.
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