Back to top

Image: Bigstock

Tesla Soaring Ahead of Q1 Earnings: ETFs in Focus

Read MoreHide Full Article

Electric carmaker Tesla Motors (TSLA - Free Report) is scheduled to report first-quarter 2019 results on Apr 29 after market close. Let’s take a closer look at its fundamentals ahead of earnings release.

Tesla has been on a stellar ride over the past three months, having gained nearly 41% and outperforming the industry’s decline of 11.8%. Most of the gains came in the last one month as the stock has more than doubled since the March low on better-than-expected Q1 car deliveries and analysts becoming optimistic that Tesla is better positioned to usher in a new era of electric vehicles. However, Tesla has less chances of beating estimates this quarter and has seen negative earnings revisions ahead of its Q1 report  (see: all the Alternative Energy ETFs here).



Earnings Whispers

Tesla has a Zacks Rank #3 (Hold) and an Earnings ESP of -138.41%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for the to-be-reported quarter has been revised downward from 3 cents to a loss of 13 cents over the past 7 days. Analysts decreasing estimates right before earnings — with the most up-to-date information possible — is not a good indicator for the stock. However, the earnings track is good for the company, which delivered a four-quarter average positive earnings surprise of 281.26%. Additionally, the Zacks Consensus Estimate for the first quarter indicates substantial earnings growth of 95.2% from the year-ago quarter.

Tesla, Inc. Price, Consensus and EPS Surprise

Tesla, Inc. Price, Consensus and EPS Surprise

Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote

Further, Wall Street analysts have become optimistic on Tesla ahead of its results with many of them raising the target price on the stock. Tesla belongs to a bottom-ranked Zacks industry (in the bottom 2%) (read: Tesla Makes a Comeback: ETFs to Ride On).

According to analysts polled by Zacks, Tesla currently has an average target price of $483.60 with 23% of the analysts having a Strong Buy or a Buy rating and 45% of having a Hold rating ahead of its earnings.

Strong Q1 Production

Earlier this month, Tesla reported stronger-than-expected Q1 deliveries amid the coronavirus crisis. The company produced 102,672 (87,282 Model 3 and Y, and 15,390 Model S and X) vehicles and delivered 88,400 (76,200 Model 3 and Y, and 12,200 Model S and X) vehicles. Though the delivery number is 21% down from the previous quarter, it is higher than 77,100 produced in the year-ago quarter.

The robust numbers were attributed to “record levels of production” from the new Gigafactory in Shanghai, China, which began operations in late 2019. Additionally, Model Y production started in January and deliveries began in March, adding to the strong numbers (read: ETFs to Ride High on Tesla's Robust Q1 Delivery Numbers).

ETFs to Watch

Given this, ETFs having the highest allocation to this luxury carmaker will be in focus going into its earnings announcement. These funds would be the potential movers if Tesla surprises the market.

First Trust NASDAQ Global Auto ETF (CARZ - Free Report) – This fund has gained 12.7% in a month and carries a Zacks ETF Rank #3 (Hold). Tesla occupies the top position with 21.3% share in the basket (read: Q1 Auto Sales Hit by Coronavirus: ETF & Stocks in Focus).

First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN - Free Report) — It has risen 19.8% and has a Zacks ETF Rank #2 (Buy). Here, Tesla takes the top spot with 18.1% share.

Global X Lithium ETF (LIT - Free Report) - The fund is up 14% in a month. Tesla takes the second spot with 14.3% allocation.

ARK Industrial Innovation ETF (ARKQ - Free Report) — The fund has delivered returns of 17.3% over the past month. Tesla occupies the top position with 13% allocation.

MicroSectors FANG+ ETN (FNGS - Free Report) — This ETN accounts for 10% share in Tesla and has gained 18.2% in the same timeframe.

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 >>

Published in