Daily quotes, trades and insights from Gary Black.

Gary Black Tracker

I asked Grok who were the ten most influential $TSLA analysts and content providers on X over the past year.  The answer didn’t change much whether I asked for the ten “most influential” vs “most credible” vs “best”.   Here was Grok’s response. 

A $TSLA/SpaceX merger makes no sense mathematically for TSLA shareholders unless there are huge cost or revenue synergies for $TSLA.  The 35% dilution is just too great given the relative P/E differences.  This is the same reason the idea of a combined enterprise with all of Elon’s businesses didn’t fly last time. 

The math is pretty straightforward:   If TSLA contributes its $1.5T market cap at a 200x P/E and SpaceX contributes its $800B market cap equity at a 400x P/E, the combined company would have $2.3T market cap, To make the math work, TSLA would dilute its shareholders by issuing 35% new shares ($800B / $2.3B), and the combined company would show $8B adj net income (TSLA $6B, SpaceX $2B).  IMO many existing TSLA institutional shareholders would balk at the uncertainty of 25% profits coming from space travel/communications and sell their shares.   Every TSLA shareholder knows that TSLA is no longer just an EV company, but Energy, Autonomy, and Robots are at least profitable and can be modeled analytically.

The industrial logic of a TSLA/SpaceX merger escapes me.  I get that a deal makes Elon’s empire easier to manage since TSLA can fund SpaceX’s negative cash flows but that’s not TSLA shareholders’ concern.  While it’s true we no longer own TSLA shares so have no horse in this race, my past warnings to TSLA shareholders (TSLA would not sell 20M cars/year by 2030, other mnfrs would master unsupervised autonomy at the same time as TSLA) proved correct and so should afford some credibility that I know what I’m talking about.  

$TSLA has now underperformed Nasdaq for 5 years (TSLA  +48% vs NDX +90%) including over the past year (TSLA +12% vs NDX +20%).  We use 1- and 5-year measurement periods because those are the most common periods used by Bloomberg users, as you can see by the Bloomberg default periods at the bottom of the graphs below.

From my pre-mkt summary for Subscribers this morning:  $TSLA +1.1% again this morning to $416 after rising +5.7% the past two days after showing significant year-over-year gains in April in China and several European countries, as global oil prices have surged.  

Despite likely continued near-term momentum fueled by rising oil prices I remain cautious on $TSLA given the company’s disappointing FY’26 outlook following robust 1Q earnings.  2026-30 earnings ests continue to decline and investors are coming to the realization that other manufacturers will also solve for unsupervised autonomy over the next 12 months. $GOOG $BIDU $WRD $PONY and $AMZN are now completing 1.0M paid unsupervised autonomous rides per week without safety monitors.  I have no position in TSLA due to its extended valuation (2026 P/E 220x vs +36% long-term EPS growth, 6.0x PEG).

For the record, I am far more aligned with $TSLA longs than shorts.  Of all OEMs, TSLA has the greatest chance over the next 12-18 months to exploit the opportunity from unsupervised autonomy as FSD efficacy improves and TSLA continues to traverse the march of nines.  

That said, It’s hard to make the TSLA P/E math work if TSLA only offers unsupervised autonomous ride handling in a few states. I don’t see consumers en mass rushing out to buy a robotaxi vehicle with just two seats sans steering wheel and pedals anytime soon. I similarly believe TSLA bulls under-estimate competitors’ abilities to scale up unsupervised autonomous ride hailing with $GOOG $BIDU, $PONY, $WRD, and $AMZN already completing 1M paid robotaxi rides per week and $NVDA offering its autonomous hardware/software stack to every OEM. 

My issue is not lack of understanding or confidence in TSLA’s unsupervised autonomous capabilities.  My concern is that at 200x 2026 EPS, the market has already discounted TSLA’s success in achieving unsupervised autonomy and ride hailing without evidence TSLA has the marketing muscle to dominate either in what will surely be crowded spaces. Put simply, I like Tesla the company but not the valuation.   For bulls who keep posting $2,500, $3,000, and even higher valuations, kindly show us the math.

$DASH +11% AH as 2Q gross order value guidance exceeded expectations and 1Q results came in line. This is similar to $UBER who also guided higher for 2Q gross bookings after posting in-line results for 1Q. 

2Q Guidance:
- Marketplace gross order value $32.4B - $33.4B vs $32.25 billion est.
- Adj Ebitda $770M-$870M vs $830M est.

1Q Results:
- Marketplace gross order value $31.6B +37% y/y, vs $31.21B est
- Rev $4.04B, +33% y/y, vs $4.15B est
- EPS 42c vs. 37c est
- Adj Ebitda $754M vs $741.4M est
- Adj gross margin 51.9% vs. 51.1% est
- Orders 933M vs 942.25M est
- Free cash flow $420M vs $631.2M est

COMMENTARY AND CONTEXT
- We continue to expect Deliveroo to contribute approximately $200 million to our Adjusted EBITDA in 2026"
- 2Q EBiTDA guidance included gross cost of the Dasher gas relief program of $50M, funded at least partially by adjusting investments in other area

DASH continues to look compelling at a FY’26 P/E of 33x and FY’26 EV/EBITDA of 19x, vs 5-year forward rev growth of +20% CAGR and 5-year forward EBITDA growth of +25% CAGR.

Conf call 430pm ET

$NFLX -10% today seems overdone given that NFLX maintained its FY’26 sales guidance (+12-14% YoY) and operating margin guidance (31.5%) despite weak 2Q rev and eps guidance.  The key risk is that NFLX still needs content and may pursue an M&A opportunity elsewhere. 

NFLX still looks compelling at a 2026 P/E of 28.6x and 2026 EV/EBITDA of 24.2x vs 2026-30 forecasted Rev growth of +10%, EBITDA growth of +16%, and EPS growth of +17%.

$NFLX -9% AH after guiding to lighter than expected 2Q revs and EPS, and announcing that founder and Board Chair Reed Hastings would not stand for re-election.  FY’26 Rev guidance was unchanged vs prior guidance despite 1Q results beating across all metrics.

1Q actuals:
- Revs $12.25B vs $12.17B est
- EPS $1.23 vs $0.76 (includes $2.6B WBD exit fee)
- Operating margin 32.3% vs 32.4% expected

2Q guide:
- Revs $12.57B vs $12.64B est
- EPS $.78 vs $.84 est

FY’26 guide:
- Revs +12-14% YoY to $50.7B-$51.7B (same as before)
- Operating margin 31.5% vs 32.0% est (same as before)
- Adv revenue $3B (no change)
- FCF $12.5B vs $11B prior due to WBC termination fee

The stock market has recovered all of its losses and is now actually up (SPX +0.9%, NDX +2.9%) since the Iran conflict began on Feb 28.  Brent crude still +38% higher than it was before the U.S. bombed Iran’s military sites, but if history repeats should continue to decline over the next 6 months, as it did after Russia attacked Ukraine in 2022.   Stocks aren’t expensive relative to 10yrTYs, with the 2026 P/E 21.4x (E/P of 4.7%, +40bp spread vs current 10yrTY of 4.3% in line with historical norms), and FY’2026 S&P 500 EPS expected to be +17% YoY vs FY’2025. 

I have maintained throughout the Iran conflict that stocks would reclaim their all time highs, and with the fighting now wrapping up and earnings season starting strong, would maintain that bullish positioning.

In today’s pre-mkt summary for Subscribers:  Equities slipped in front of today’s almost certain 25bp Fed rate cut and new dot plot showing 2 additional rate cuts in 2026;  $WBD continues to move higher as investors expect bidding to go above the current $30/share cash offer by $PSKY;  $NVDA wavered as the Chinese govt considered whether to allow its tech companies to buy Nvidia's H200 chips after President Trump's decision to resume their export to the country;  $AVAV fell after the 43-day U.S. govt shutdown shifted order activity until later in 2026 even as demand remained strong;  $TSLA rose after Elon Musk said Tesla had "pretty much solved" unsupervised full-self-driving and reiterated that driverless Robotaxis would be available in Austin in three weeks.