Tesla (NASDAQ: TSLA) is expected to publish its Q1 2021 results after the markets close on Monday, April 26. The electric vehicle behemoth has already provided delivery figures for the quarter, noting that it sold 184,800 vehicles over the quarter, a 2.2% sequential increase, and a 109% year-over-year increase. So how are Tesla’s quarterly earnings expected to trend? We expect revenues to come in at about $10 billion, marking an increase of about 67% compared to last year, although this is slightly below the consensus estimates of $10.2 billion. Revenue is likely to decline sequentially, as Tesla paused production of its higher-priced Model S and Model X over Q1 to make way for new versions of both luxury vehicles. Analysts expect Tesla’s adjusted EPS to come in at about $0.76 per share – more than 3x last year’s figure, driven by better-fixed cost absorption amid higher deliveries and possibly higher regulatory credit sales. However, the EPS forecasts are marginally below consensus estimates of $0.78.
Overall, while year-over-year growth is expected to remain strong, we still think Tesla stock is expensive. At its current price of about $740 per share, the stock trades at around 172x estimated 2021 earnings and about 14x 2021 revenues. That being said, Tesla stock still has momentum on its side, and if the company can deliver a solid earnings beat, it’s very likely that the stock will rally.
Tesla’s Q1 Deliveries:
Tesla said that it delivered a total of 184,800 vehicles over Q1 2021.  This marks an increase of about 2.2% sequentially and about 109% year-over-year. The delivery numbers are strong, considering that the company had to shut down its Fremont facility for two days in February on account of some parts shortages. Moreover, the broader auto industry has had to contend with a shortage of semiconductors and Tesla’s numbers indicate that it likely isn’t being impacted. Model 3 and Model Y deliveries grew by almost 140% year-over-year to 182,780 units, driven by stronger sales in China where the company now also produces the Model Y SUV. However, Model S and X sales stood at just 2,020 units, as Tesla temporarily stopped production of both vehicles. Although the company did not provide specific reasons for this, it is currently ramping up the production of refreshed versions of both vehicles.
So how will these results impact Tesla’s Q1 2021 results, which are likely due later this month? Revenues and margins will likely trend slightly lower sequentially on account of a lower mix of luxury vehicle sales. That said, Tesla still looks set for a robust 2021, with production scaling up at its Shanghai plant and new factories set to come online in Texas and Berlin. Pent-up demand for new versions of the Model X and S – which are now seeing some of their most substantial updates since they were first launched – is also likely to help. During its most recent earnings call, Tesla said that it expects to grow deliveries at a CAGR of 50% a year over a multi-year horizon.
Estimates: Analysts polled by Zacks Investment Research expect EPS of 79 cents, a 216% year-over-year surge. Sales are seen jumping 66% to $9.92 billion.
Tesla delivered 184,800 vehicles in Q1, up 109% and beating estimates for 168,000. The EV maker posted EPS of 80 cents in Q4, its fifth straight quarter of earnings growth.
Tesla is benefiting from relatively easy year-earlier comparisons, with coronavirus shutdowns affecting the Shanghai and Fremont plants. Also, the Shanghai plant was just ramping up Model 3 production, while made-in-China Model Y deliveries didn’t start until January 2021.
Outlook: Tesla may also refine its delivery forecast. In January, it predicted a 50% average annual growth in vehicle deliveries, with 2021 expected to be faster than that pace. In 2020, deliveries grew 36% to 499,647.
Investors will also look for any hints about the Tesla Cybertruck and Semi, as well as progress for the Berlin and Austin factories under construction.
Tesla Long (Buy)
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