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Tesla to Report After the Bell: What Lies Ahead for ETFs?
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Electric carmaker Tesla Motors (TSLA - Free Report) is scheduled to report first-quarter 2021 results today after market close. Let’s take a closer look at its fundamentals ahead of earnings release.
Tesla has been on a rough journey over the past three months, having lost 15.6%, more than double the industry’s loss of 6.5%. 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 Q1 report.
Earnings Whispers
Tesla has a Zacks Rank #3 (Hold) and an Earnings ESP of +12.06%. 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 electric carmaker saw positive earnings estimate revision of four cents 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 308.9%. Additionally, the Zacks Consensus Estimate for the first quarter indicates substantial year-over-year growth of 216% for earnings and 65.8% for revenues (see: all the Alternative Energy ETFs here).
Further, most analysts are bullish for the electric carmaker ahead of the Q1 earnings announcement. Canaccord Genuity, which is bullish on Tesla’s battery storage business, has lifted the target price to $1,071 per share from $419 per share. Wedbush Securities raised the target price to $1,000 a share from $950 as it sees Tesla's profitability significantly improving over the next three to four years.
Tesla has a Growth Score of A and belongs to a top-ranked Zacks industry (in the top 36%). The Zacks Consensus Estimate for the average target price is $637.32 with nearly 48% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
Strong Q1 Production
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 were up 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).
On it Q4 earnings call, the electric carmaker projected another year of strong growth in vehicle deliveries for 2021 as it has been aggressively expanding its vehicle production capacity. It expects to achieve 50% average annual growth in vehicle deliveries in the coming years. Volumes may even grow at a faster rate in some of the years and 2021 could be one of them, the company projected.
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.
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 Tesla 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 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 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 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 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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Tesla to Report After the Bell: What Lies Ahead for ETFs?
Electric carmaker Tesla Motors (TSLA - Free Report) is scheduled to report first-quarter 2021 results today after market close. Let’s take a closer look at its fundamentals ahead of earnings release.
Tesla has been on a rough journey over the past three months, having lost 15.6%, more than double the industry’s loss of 6.5%. 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 Q1 report.
Earnings Whispers
Tesla has a Zacks Rank #3 (Hold) and an Earnings ESP of +12.06%. 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 electric carmaker saw positive earnings estimate revision of four cents 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 308.9%. Additionally, the Zacks Consensus Estimate for the first quarter indicates substantial year-over-year growth of 216% for earnings and 65.8% for revenues (see: all the Alternative Energy ETFs here).
Tesla, Inc. Price, Consensus and EPS Surprise
Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote
Further, most analysts are bullish for the electric carmaker ahead of the Q1 earnings announcement. Canaccord Genuity, which is bullish on Tesla’s battery storage business, has lifted the target price to $1,071 per share from $419 per share. Wedbush Securities raised the target price to $1,000 a share from $950 as it sees Tesla's profitability significantly improving over the next three to four years.
Tesla has a Growth Score of A and belongs to a top-ranked Zacks industry (in the top 36%). The Zacks Consensus Estimate for the average target price is $637.32 with nearly 48% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
Strong Q1 Production
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 were up 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).
On it Q4 earnings call, the electric carmaker projected another year of strong growth in vehicle deliveries for 2021 as it has been aggressively expanding its vehicle production capacity. It expects to achieve 50% average annual growth in vehicle deliveries in the coming years. Volumes may even grow at a faster rate in some of the years and 2021 could be one of them, the company projected.
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.
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 Tesla 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 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 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).
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.
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 >>