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After the closing bell on Monday, Tesla Motors (TSLA - Free Report) posted the biggest profit in its history shrugging off the global chip crisis when it released Q1 earnings. The electric carmaker beat the estimates on both earnings and revenues.
Q1 Earnings in Focus
Adjusted earnings per share came in at 93 cents, easily beating the Zacks Consensus Estimate of 79 cents and the year-ago earnings of 25 cents. Revenues jumped 74% year over year to $10.39 billion and edged past the Zacks Consensus Estimate of $9.92 billion.
Earlier this month, Tesla reported robust deliveries for first-quarter 2021. The company produced 180,338 (Model 3 and Y) vehicles and delivered a record 184,800 (182,780 Model 3 and Y, and 2,020 Model S and X) vehicles. Deliveries increased 109% from the year-ago quarter and 2.3% from Q4. The Model Y was the primary catalyst for Tesla's vehicle sales growth during the quarter. The company stated that it was encouraged by strong reception of the Model Y in China and noted that it was quickly progressing to full production capacity (read: Tesla ETFs to Tap Robust Q1 Deliveries, Biden EV's Plan).
The automakers around the world have been forced to shut factories this year due to a crippling shortage of automotive microchips, but Tesla has been standing tall and is able to continue production at its plants in California and Shanghai.
The electric carmaker continues to see growing pent-up demand throughout China and Europe despite stiff competition from the likes of General Motors (GM - Free Report) and Nio (NIO - Free Report) , with the United States on the verge of seeing further increased demand once the EV tax credit ceiling is lifted.
Tesla expects another year of strong growth in vehicle deliveries as it has been aggressively expanding its vehicle production capacity. It reiterated its plan 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 are likely to help achieve this goal. Both in-progress Gigafactories in Berlin and Texas are on track to begin production and deliveries this year. Also, Tesla Semi deliveries will begin later in 2021.
Despite the awesome results, shares of Tesla dropped as much as 2% in aftermarket trading on elevated volumes. The beaten down price seems an attractive entry point for investors seeking to bet on this luxury carmaker, which has a top Growth and Momentum Score of A each. The stock currently has a Zacks Rank #3 (Hold) and belongs to a top-ranked Zacks industry (in the top 36%).
ETFs to Buy
We have highlighted seven ETFs having a double-digit allocation to this luxury carmaker and could be compelling picks to tap Tesla’s growth.
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report)
This is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology. It is heavily exposed to the Tesla stock and call options at 25% share. The fund seeks to boost performance during extreme moves up in Tesla, charging investors 1.09% in annual fees. It has accumulated $2.1 million in its asset base while trades in an average daily volume of 7,000 shares (read: Guide to Electric Vehicle ETFs).
This ETF offers exposure to U.S. companies that produce a wide range of consumer goods, including food, automobiles, and household goods by tracking the Dow Jones U.S. Consumer Goods Index. It holds about 98 stocks in its basket with Tesla occupying the top position at 17% allocation. The fund has amassed $716.3 million in its asset base while trades in a volume of about 48,000 shares. It charges 43 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
This product offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most-popular product in this space, with AUM of $20.5 billion and an average daily volume of around 4.4 million shares. Holding 63 securities in its basket, Tesla takes the second spot with 14.2% of assets. The fund charges 12 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: ETFs to Gain on Strong U.S. Consumer Sentiment in April).
This is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services as well as technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials and transportation. This approach results in a basket of 49 stocks, with TSLA occupying the top spot with 11.5% share. The product has accumulated $3.3 billion in its asset base and charges 75 bps in fees per year. It trades in volume of 1.3 million shares a day on average.
This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to the cloud, enabling mobile, new and local services. The fund holds 54 stocks in its basket with Tesla occupying the top position at 10.5%. The ETF has amassed $6.8 billion in its asset base and charges 79 bps in annual fees. It trades in an average daily volume of 1.9 million shares.
This is an actively managed fund investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. In total, the fund holds 58 securities in its basket with Tesla occupying the top position, accounting for 10.2% share. The product has gathered $23.7 billion in its asset base and charges 75 bps in fees per year from its investors. It trades in volume of 13.9 million shares per day on average (read: 6 ETFs That Have Fast Filled Coinbase in Their Roster).
This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket with Tesla accounting for 10% share. The product has accumulated $72.3 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 58000 shares and has a Zacks ETF Rank #3.
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ETFs to Buy on Tesla's Blowout Q1 Earnings
After the closing bell on Monday, Tesla Motors (TSLA - Free Report) posted the biggest profit in its history shrugging off the global chip crisis when it released Q1 earnings. The electric carmaker beat the estimates on both earnings and revenues.
Q1 Earnings in Focus
Adjusted earnings per share came in at 93 cents, easily beating the Zacks Consensus Estimate of 79 cents and the year-ago earnings of 25 cents. Revenues jumped 74% year over year to $10.39 billion and edged past the Zacks Consensus Estimate of $9.92 billion.
Earlier this month, Tesla reported robust deliveries for first-quarter 2021. The company produced 180,338 (Model 3 and Y) vehicles and delivered a record 184,800 (182,780 Model 3 and Y, and 2,020 Model S and X) vehicles. Deliveries increased 109% from the year-ago quarter and 2.3% from Q4. The Model Y was the primary catalyst for Tesla's vehicle sales growth during the quarter. The company stated that it was encouraged by strong reception of the Model Y in China and noted that it was quickly progressing to full production capacity (read: Tesla ETFs to Tap Robust Q1 Deliveries, Biden EV's Plan).
The automakers around the world have been forced to shut factories this year due to a crippling shortage of automotive microchips, but Tesla has been standing tall and is able to continue production at its plants in California and Shanghai.
The electric carmaker continues to see growing pent-up demand throughout China and Europe despite stiff competition from the likes of General Motors (GM - Free Report) and Nio (NIO - Free Report) , with the United States on the verge of seeing further increased demand once the EV tax credit ceiling is lifted.
Tesla expects another year of strong growth in vehicle deliveries as it has been aggressively expanding its vehicle production capacity. It reiterated its plan 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 are likely to help achieve this goal. Both in-progress Gigafactories in Berlin and Texas are on track to begin production and deliveries this year. Also, Tesla Semi deliveries will begin later in 2021.
Despite the awesome results, shares of Tesla dropped as much as 2% in aftermarket trading on elevated volumes. The beaten down price seems an attractive entry point for investors seeking to bet on this luxury carmaker, which has a top Growth and Momentum Score of A each. The stock currently has a Zacks Rank #3 (Hold) and belongs to a top-ranked Zacks industry (in the top 36%).
ETFs to Buy
We have highlighted seven ETFs having a double-digit allocation to this luxury carmaker and could be compelling picks to tap Tesla’s growth.
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report)
This is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology. It is heavily exposed to the Tesla stock and call options at 25% share. The fund seeks to boost performance during extreme moves up in Tesla, charging investors 1.09% in annual fees. It has accumulated $2.1 million in its asset base while trades in an average daily volume of 7,000 shares (read: Guide to Electric Vehicle ETFs).
iShares U.S. Consumer Goods ETF (IYK - Free Report)
This ETF offers exposure to U.S. companies that produce a wide range of consumer goods, including food, automobiles, and household goods by tracking the Dow Jones U.S. Consumer Goods Index. It holds about 98 stocks in its basket with Tesla occupying the top position at 17% allocation. The fund has amassed $716.3 million in its asset base while trades in a volume of about 48,000 shares. It charges 43 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
This product offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most-popular product in this space, with AUM of $20.5 billion and an average daily volume of around 4.4 million shares. Holding 63 securities in its basket, Tesla takes the second spot with 14.2% of assets. The fund charges 12 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: ETFs to Gain on Strong U.S. Consumer Sentiment in April).
ARK Industrial Innovation ETF (ARKQ - Free Report)
This is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services as well as technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials and transportation. This approach results in a basket of 49 stocks, with TSLA occupying the top spot with 11.5% share. The product has accumulated $3.3 billion in its asset base and charges 75 bps in fees per year. It trades in volume of 1.3 million shares a day on average.
ARK Next Generation Internet ETF (ARKW - Free Report)
This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to the cloud, enabling mobile, new and local services. The fund holds 54 stocks in its basket with Tesla occupying the top position at 10.5%. The ETF has amassed $6.8 billion in its asset base and charges 79 bps in annual fees. It trades in an average daily volume of 1.9 million shares.
ARK Innovation ETF (ARKK - Free Report)
This is an actively managed fund investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. In total, the fund holds 58 securities in its basket with Tesla occupying the top position, accounting for 10.2% share. The product has gathered $23.7 billion in its asset base and charges 75 bps in fees per year from its investors. It trades in volume of 13.9 million shares per day on average (read: 6 ETFs That Have Fast Filled Coinbase in Their Roster).
MicroSectors FANG+ ETN (FNGS - Free Report)
This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket with Tesla accounting for 10% share. The product has accumulated $72.3 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 58000 shares and has a Zacks ETF Rank #3.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>