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Tesla (TSLA - Free Report) is a Zacks Rank #1 (Strong Buy) and the company just reported production and delivery numbers for the most recent quarter. Let’s take a deeper look at this stock in this Bull of the Day article.
Description
Tesla, Inc. makes electric vehicles and energy generation and storage systems in the United States, China, and internationally. The company operates in two segments, Automotive and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits. The Energy Generation and Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation and energy storage products, and related services to residential, commercial, and industrial customers and utilities through its website, stores, and galleries, as well as through a network of channel partners. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California.
Solar Roofs
I have been trying to get a hold of someone at Tesla to speak with me about the solar roof end of the business. My emails have not been responded to, so I hope this article will get a better reaction.
My understanding of the solar roofs is that they are priced based on the current amount of electric usage for a home. There is a breakeven price at about 20 years, and a warranty of 25 years.
Solar panels also carry significant tax credits for users, but for now, the credits are being absorbed by Tesla.
In Southwest Florida, there is an issue with lightning strikes that knock the grid off for just a few seconds, but the reboot cycle for the internet and shock to appliances makes the idea of having a solar roof that much more valuable.
All that being said, there are still issues with the roof and I hope that someone at Tesla sees this article and reaches out to me (BBolan@Zacks.com).
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For TSLA, I see a good history of beating the Zacks Consensus Estimate. There are three beats over the last four quarters.
The average positive earnings surprise over the last fours quarters works out to be 26%, which means the company is consistently posting good-sized beats of the Zacks Consensus Estimate.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For TSLA, I see estimates moving higher.
Over the last 60 days, I see a few increases.
This quarter has moved from $1.23 to $1.129.
Next quarter has moved from $1.46 to $1.53.
The full-year number has increased from $4.95 to $5.18 over the last 60 days.
Next year is at $6.92 and that is up from $6.76 over the same time horizon.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
Valuation
The valuation for TSLA is on the high end, but with growth like this you would expect investors to pay up. I see an 150x forward earnings multiple and sales growth in the most recent quarter coming in just over 98%. The price to book multiple of 30x is well above the industry average. Price to sales comes in at 18x and again this is well below the industry average of.
Cybertruck Delayed
I should mention that I hold this stock in the Tech Innovators portfolio that I manage here at Zacks as well as in my personal account. Tech Innovators added the stock amid the COVID Crash.
One of the biggest tailwinds for the stock is the 1M+ order for the Cybertruck and the story about the demand for power walls well outpacing the supply.
The gain Tech Innovators is showing on the stock is in excess of 750%, but one of the main reasons to hold the stock is not pushed out until late 2022. While TSLA has handled the chip shortage better than most, the worry around the solar roof and delays for Cybertruck have me thinking about when it would be best to protect profits.
Image: Bigstock
Bull Of The Day: Tesla (TSLA)
Tesla (TSLA - Free Report) is a Zacks Rank #1 (Strong Buy) and the company just reported production and delivery numbers for the most recent quarter. Let’s take a deeper look at this stock in this Bull of the Day article.
Description
Tesla, Inc. makes electric vehicles and energy generation and storage systems in the United States, China, and internationally. The company operates in two segments, Automotive and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits. The Energy Generation and Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation and energy storage products, and related services to residential, commercial, and industrial customers and utilities through its website, stores, and galleries, as well as through a network of channel partners. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California.
Solar Roofs
I have been trying to get a hold of someone at Tesla to speak with me about the solar roof end of the business. My emails have not been responded to, so I hope this article will get a better reaction.
My understanding of the solar roofs is that they are priced based on the current amount of electric usage for a home. There is a breakeven price at about 20 years, and a warranty of 25 years.
Solar panels also carry significant tax credits for users, but for now, the credits are being absorbed by Tesla.
In Southwest Florida, there is an issue with lightning strikes that knock the grid off for just a few seconds, but the reboot cycle for the internet and shock to appliances makes the idea of having a solar roof that much more valuable.
All that being said, there are still issues with the roof and I hope that someone at Tesla sees this article and reaches out to me (BBolan@Zacks.com).
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For TSLA, I see a good history of beating the Zacks Consensus Estimate. There are three beats over the last four quarters.
The average positive earnings surprise over the last fours quarters works out to be 26%, which means the company is consistently posting good-sized beats of the Zacks Consensus Estimate.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For TSLA, I see estimates moving higher.
Over the last 60 days, I see a few increases.
This quarter has moved from $1.23 to $1.129.
Next quarter has moved from $1.46 to $1.53.
The full-year number has increased from $4.95 to $5.18 over the last 60 days.
Next year is at $6.92 and that is up from $6.76 over the same time horizon.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
Valuation
The valuation for TSLA is on the high end, but with growth like this you would expect investors to pay up. I see an 150x forward earnings multiple and sales growth in the most recent quarter coming in just over 98%. The price to book multiple of 30x is well above the industry average. Price to sales comes in at 18x and again this is well below the industry average of.
Cybertruck Delayed
I should mention that I hold this stock in the Tech Innovators portfolio that I manage here at Zacks as well as in my personal account. Tech Innovators added the stock amid the COVID Crash.
One of the biggest tailwinds for the stock is the 1M+ order for the Cybertruck and the story about the demand for power walls well outpacing the supply.
The gain Tech Innovators is showing on the stock is in excess of 750%, but one of the main reasons to hold the stock is not pushed out until late 2022. While TSLA has handled the chip shortage better than most, the worry around the solar roof and delays for Cybertruck have me thinking about when it would be best to protect profits.
Chart
Tesla, Inc. Price, Consensus and EPS Surprise
Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote