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Tesla needs a perfect year. That won't be easy

April 27, 2021. Summarized by summa-bot.

Compression ratio: 20.1%. 1 min read.

Tesla just posted record quarterly profits, with one measure of earnings passing the $1 billion mark for the first time.

London (CNN Business)Tesla (TSLA) just posted record quarterly profits, with one measure of earnings passing the $1 billion mark for the first time.

Some Wall Street analysts still see a solid case for Tesla's stock, which is trading at more than 1,100 times its earnings, according to data from Refinitiv.

But a closer look at the company's financial results show that a big reason the company had a strong start to the year is because of its sale of regulatory credits, which brought in $518 million in revenue, and bitcoin holdings.

Zachary Kirkhorn, the automaker's "master of coin" (okay, chief financial officer), said the company later sold 10% of its position, resulting in a $101 million profit.

That's nearly a quarter of the $438 million Tesla earned when results are adjusted for stricter accounting standards.

Tesla could still rise above the fray — and Bespoke Investment Group notes that the company's stock is often divorced from its financial performance anyways.

"The earnings expectations for the S&P 500 are through the roof for this year as investors expect this great recovery, and tech is a big part of that," said Daniel Morgan, senior portfolio manager with Synovus Trust Company.

"They are high-growth companies but also defensive because they could still do well if the reopening of the economy doesn't go smoothly after Covid," said Chris Gaffney, president of world markets at TIAA Bank.

by summa-bot

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