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Turns out Tesla (TSLA) and the tariffs have something in common. They both came in way worse then the worst case scenario.

Q1 results came out last night and it wasn’t pretty. A truly terrible quarter across the board. Earnings came in 34% below the already pessimistic street estimates! Representing an earnings decline of 40% below last year.

This makes it the 6th time in the last 8 quarters that the company has reported results below expectations. But I can’t ever recall a time it came in 34% below!

Sales came in 9% below estimates, the biggest disappointment on sales in a very long time. If ever. Also the 6th time in the last 8 quarters that sales have missed expectations, and the 3rd straight quarter to do so.

Deliveries declined 13% and came in 10% below street estimates. The 3rd straight miss on deliveries.

Earnings, sales, & deliveries misses; the trifecta of disappointment. But on the conference call Musk said he would be spending more time at the company, coupled with comments from the administration that suggested the China tariffs will be coming down. This caused the stock to rally this morning.

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The stock held the $227 level, which matched the size of the 2023 pullback. And now trades around $260 this morning.

But I won’t be catching this falling knife anytime soon. The stock still trades at 111x forward EPS, on expected growth of 7.8% and sales growth of 8.4%. Way below the company’s historical average.

As the graph in the top of this post shows, Tesla’s troubles pre-date Musk’s involvement in DOGE. In hindsight, the post election rally to all time highs was a big no-brainer short setup. Perhaps the worst is now behind the company, but I prefer to wait and let them prove it first by finally beating estimates for a quarter or two before attempting to catch this falling knife.

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