We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Buy Tesla (TSLA) Stock Ahead of Q1 Earnings?
Read MoreHide Full Article
Shares of Tesla (TSLA - Free Report) have sunk nearly 16% over the last 12 weeks as investors begin to worry that the electric car company might not be able to live up to its own promises. With pressure mounting on Elon Musk and Tesla, let’s take a look to see what to expect from the company’s first quarter financial results.
Tesla stock has tanked recently on the back of heightened debt concerns and continued Model 3 production woes. Meanwhile, automotive industry powers General Motors (GM - Free Report) , Volkswagen , and Ford (F - Free Report) all committed to their own electric vehicle futures. Many Tesla investors are also increasingly unimpressed by Musk’s Twitter rants.
Still, a strong first quarter could help Tesla get its groove back and propel the company to a stellar year.
Latest Outlook & Results
Tesla’s quarterly revenues are expected to pop by 16.5% to reach $3.14 billion, based on our current Zacks Consensus Estimates. At the opposite end of the income statement, Tesla’s quarterly earnings are projected to plummet 153.4% from the year-ago period. Worst still, the company is projected to report an adjusted quarterly loss of $3.37 per share.
Of course, top and bottom line growth estimates are just two of the many things investors will be concerned with when Tesla reports. Luckily, the company has already reported its initial first quarter production results, which should help investors gain a better understanding of what to expect from Tesla.
Tesla announced in early April that it produced a total of 34,494 vehicles during Q1, which represented a 40% surge from the fourth quarter. Tesla noted that this was “by far” its most productive quarter in company history. At the time, the company said it had produced 2,020 Model 3 vehicles within the previous seven days.
Tesla also reiterated its goal to produce roughly 5,000 mass-market Model 3 units per week by some point during the second quarter. Meanwhile, the electric car company delivered a total of 29,980 vehicles in Q1, of which 8,180 were Model 3s. Lastly, Tesla said it will “not require an equity or debt raise this year, apart from standard credit lines.”
Earnings ESP Whispers
Moving on, investors will also want to understand what chance Tesla has to surprise investors with better-than-expected earnings results. For this, we turn to our Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates. This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
In contrast, a stock with a Zacks Rank #3 (Hold) or worse, coupled with a negative Earnings ESP, is one investors typically want to avoid during earnings season.
Tesla is currently a Zacks Rank #3 (Hold) and sports an Earnings ESP of -8.67%. The company’s Most Accurate Estimate—the representation of the most recent analyst sentiment—calls for an adjusted loss of $3.66 per share, which is 29 cents worse than our current consensus estimate. Therefore, TSLA is a stock that could fall short of our quarterly earnings estimates.
Bottom Line
Tesla has reported mixed earnings results over the last year, posting two beats and two misses. The company also tends to post pretty significant surprises, in both directions. This means investors might want to be cautious with Tesla ahead of earnings, especially since the company currently rocks a negative Earnings ESP figure.
Investors might also consider waiting to see how Tesla’s increased production actually impacts its top and bottom lines, as a miss could easily send the stock down.
Make sure to check back here for a complete breakdown of Tesla’s Q1 financial results after market close on Wednesday.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Should You Buy Tesla (TSLA) Stock Ahead of Q1 Earnings?
Shares of Tesla (TSLA - Free Report) have sunk nearly 16% over the last 12 weeks as investors begin to worry that the electric car company might not be able to live up to its own promises. With pressure mounting on Elon Musk and Tesla, let’s take a look to see what to expect from the company’s first quarter financial results.
Tesla stock has tanked recently on the back of heightened debt concerns and continued Model 3 production woes. Meanwhile, automotive industry powers General Motors (GM - Free Report) , Volkswagen , and Ford (F - Free Report) all committed to their own electric vehicle futures. Many Tesla investors are also increasingly unimpressed by Musk’s Twitter rants.
Still, a strong first quarter could help Tesla get its groove back and propel the company to a stellar year.
Latest Outlook & Results
Tesla’s quarterly revenues are expected to pop by 16.5% to reach $3.14 billion, based on our current Zacks Consensus Estimates. At the opposite end of the income statement, Tesla’s quarterly earnings are projected to plummet 153.4% from the year-ago period. Worst still, the company is projected to report an adjusted quarterly loss of $3.37 per share.
Of course, top and bottom line growth estimates are just two of the many things investors will be concerned with when Tesla reports. Luckily, the company has already reported its initial first quarter production results, which should help investors gain a better understanding of what to expect from Tesla.
Tesla announced in early April that it produced a total of 34,494 vehicles during Q1, which represented a 40% surge from the fourth quarter. Tesla noted that this was “by far” its most productive quarter in company history. At the time, the company said it had produced 2,020 Model 3 vehicles within the previous seven days.
Tesla also reiterated its goal to produce roughly 5,000 mass-market Model 3 units per week by some point during the second quarter. Meanwhile, the electric car company delivered a total of 29,980 vehicles in Q1, of which 8,180 were Model 3s. Lastly, Tesla said it will “not require an equity or debt raise this year, apart from standard credit lines.”
Earnings ESP Whispers
Moving on, investors will also want to understand what chance Tesla has to surprise investors with better-than-expected earnings results. For this, we turn to our Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates. This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
In contrast, a stock with a Zacks Rank #3 (Hold) or worse, coupled with a negative Earnings ESP, is one investors typically want to avoid during earnings season.
Tesla is currently a Zacks Rank #3 (Hold) and sports an Earnings ESP of -8.67%. The company’s Most Accurate Estimate—the representation of the most recent analyst sentiment—calls for an adjusted loss of $3.66 per share, which is 29 cents worse than our current consensus estimate. Therefore, TSLA is a stock that could fall short of our quarterly earnings estimates.
Bottom Line
Tesla has reported mixed earnings results over the last year, posting two beats and two misses. The company also tends to post pretty significant surprises, in both directions. This means investors might want to be cautious with Tesla ahead of earnings, especially since the company currently rocks a negative Earnings ESP figure.
Investors might also consider waiting to see how Tesla’s increased production actually impacts its top and bottom lines, as a miss could easily send the stock down.
Make sure to check back here for a complete breakdown of Tesla’s Q1 financial results after market close on Wednesday.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>