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Tesla (TSLA) gave back Friday's gains after deliveries were reported over the weekend. Short term the chart held an uptrend but I've been pointing out that the stock keeps failing overhead resistance which is now pretty strong around the 200-day at 215.

I updated my earnings numbers to better include price cuts this quarter which brings my quarterly numbers below the Street for this quarter, next quarter and the year.

There's a good shot that the average price drop can surprise the Street to the downside and a drop in costs may not be enough to save margins.

The biggest driver to my EPS model since following Tesla has been auto gross margins. They were down about 200bp last quarter and based on the price cuts I think they can be down again, maybe more than last quarter..

This change puts my 2023 EPS at $2.53 which is well below the Street's $3.90.

When we were lone bulls on the sell side for a few years our estimates were way above the Street. Now we're way below. In late 2021 the Street numbers caught up to our numbers and we became less bullish. Since then the stock has been in a downtrend.

And until they nail true FSD, there's valuation compression risk as mega-bulls back off as their FSD-driven super-high margin targets keep getting pushed out.

What they accomplished is, of course, amazing and yes they have a lot of potential ahead of them. But we care about risk/reward. The story as it stands now is a show-me unless you're a blind-faith believer in true FSD, which I get, but I am not. So until true-FSD gets proven out the high valuation call based on an earnings slowdown is not a layup.

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