Tesla (NASDAQ: TSLA) is expected to report second-quarter earnings Monday after market close.
According to FactSet, Wall Street is looking for Tesla to report about 94 cents in per-share earnings from $11.5 billion in sales. Beating analyst estimates is important, almost required, for any stock to remain stable in post-earnings trading. That’s true for Tesla as well. Tesla has been on a rough journey over the past three months, having lost 11%, more than double the industry’s decline of 2.7%. The trend might reverse if the luxury carmaker comes up with an earnings beat this quarter. The company has seen positive earnings revisions, which are generally a precursor to an earnings beat, ahead of its Q2 report.
Tesla has a Zacks Rank #2 (Buy) and an Earnings ESP of +5.85%.
The electric carmaker saw positive earnings estimate revision of a penny over the past 30 days. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The earnings track is robust for the company, which delivered a four-quarter average earnings surprise of 147.4%. Additionally, the Zacks Consensus Estimate for the second quarter indicates substantial year-over-year growth of 104.5% for earnings and 88.7% for revenues. Tesla has a top Growth Score of A and belongs to a top-ranked Zacks industry (in the top 17%). The Zacks Consensus Estimate for the average target price is $660.9 with nearly 46% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings. While Tesla is poised for robust growth, its valuation remains high. The stock has a P/E ratio of 152.64 versus the industry average of 15.14.
Strong Q2 Production:
Earlier this month, Tesla reported record deliveries for the second quarter of 2021. It delivered a record 201,250 (199,360 Model 3 and Y, and 1,890 Model S and X) vehicles. Deliveries were up 121%, the highest growth rate in two years, from the year-ago quarter and an acceleration from the 109% year-over-year growth reported in Q1. In fact, Tesla logged its best quarter of deliveries ever. The electric carmaker produced 206,421 (204,081 Model 3 and Y, and 2,340 Model S and X) vehicles during the quarter. Including Q2 deliveries, Tesla has delivered a total of 386,050 cars so far in 2021. Tesla did not announce official guidance for this year but stated in its Q1 Update Letter that it expects “to achieve 50% average annual growth in vehicle deliveries in the coming years.” The ramp-up of production at Tesla’s Shanghai Gigafactory, which began delivering vehicles to customers in China in January last year, and its forthcoming facilities in Berlin and Texas is likely to help it achieve this goal.
EARNINGS: As of writing, the consensus from 39 analysts polled by FactSet points to Tesla reporting adjusted earnings of $0.93 per share. This is a notable increase from Q2 2020 when Tesla posted adjusted earnings of $0.44 per share. FactSet consensus also points to Tesla’s GAAP earnings standing at $0.53 per share. Estimize, which aggregates estimates from Wall St. analysts, fund managers, company executives, and others, is more optimistic with an adjusted profit estimate of $1.02 per share.
REVENUE: FactSet consensus currently estimates sales of $11.47 billion for Q2, more than double the $5.18 billion that Tesla posted in the same quarter last year. Estimize, on the other hand, is more optimistic once more, expecting revenue of $11.68 billion from the EV maker.
Tesla Long (Buy)
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