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Tesla (TSLA) Beats on Top & Bottom Lines; Guidance Expected
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Markets finished their first trading session of a new week mixed; in fact, reverting back to previous sentiment prior to the latest quest of rotating back into cyclicals out of high-growth tech. Ahead of Q1 Big Tech earnings this week — including Facebook, Apple, Amazon and Google of FAANG fame — the Nasdaq has set itself a fresh all-time high close, +0.87% to 14,138.78. The Dow was down 0.18% on the day, while the S&P was the mirror opposite: +0.18%. The Russell 2000 gained the most: +1.15% on the day.
After the closing bell, Tesla (TSLA - Free Report) starts the festivities with impressive beats on both top and bottom lines for Q1: 93 cents per share on $10.39 billion in sales easily surmounted the 79 cents per share (and mere 25 cents reported in the year-ago quarter) and $9.92 billion expected, for earnings growth of 372% year over year. Vehicle delivery gross margins of 26.5% grew nearly a full percentage point year over year. The company has only missed once on its bottom line in the past seven quarters.
This gross margin figure may prove key in Tesla’s conference call Monday afternoon. Currently, 799K vehicle deliveries are expected from the company in 2021. Should a hotter-than-expected pace carry forth, especially in higher-growth regions like China (which has reported some consumer experience issues of late), we might expect this guidance to increase. At that point, Tesla’s -2% performance following its Q1 release may actually gain momentum in a positive direction.
Then again, Tesla shares are already trading at beyond-peak valuation, with a price-to-earnings ratio of 170x. Tesla shares are flat year-to-date, though +360% from a year ago. CEO Elon Musk usually relishes presenting his company’s performance during quarters like this, and often can massage extra support from investors based on his longer-term plans. We don’t see much reason for him to change the formula this time around.
During the regular trading session today, Apple (AAPL - Free Report) announced a new direct-spending program of $430 billion over the next five years, including a new billion-dollar engineering campus breaking ground in North Carolina. As tech stocks with deep production ties to China and elsewhere in the Far East continue to receive political flak from not providing opportunities here at home, Apple’s solution appears to be making new investments in its home country through 2026.
The company says it will have “10’s of billions of dollars” for next-generation silicon development, 5G, etc. Apple will engage in direct spending programs with more than 9000 suppliers in the U.S. alone, providing 3000+ new jobs in machine learning, A.I. and software engineering. Shares of the world’s largest gadget maker are flat on the news; fiscal Q2 earnings results are expected this Wednesday afternoon, after the closing bell. Questions or comments about this article and/or its author? Click here>>
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
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Tesla (TSLA) Beats on Top & Bottom Lines; Guidance Expected
Markets finished their first trading session of a new week mixed; in fact, reverting back to previous sentiment prior to the latest quest of rotating back into cyclicals out of high-growth tech. Ahead of Q1 Big Tech earnings this week — including Facebook, Apple, Amazon and Google of FAANG fame — the Nasdaq has set itself a fresh all-time high close, +0.87% to 14,138.78. The Dow was down 0.18% on the day, while the S&P was the mirror opposite: +0.18%. The Russell 2000 gained the most: +1.15% on the day.
After the closing bell, Tesla (TSLA - Free Report) starts the festivities with impressive beats on both top and bottom lines for Q1: 93 cents per share on $10.39 billion in sales easily surmounted the 79 cents per share (and mere 25 cents reported in the year-ago quarter) and $9.92 billion expected, for earnings growth of 372% year over year. Vehicle delivery gross margins of 26.5% grew nearly a full percentage point year over year. The company has only missed once on its bottom line in the past seven quarters.
This gross margin figure may prove key in Tesla’s conference call Monday afternoon. Currently, 799K vehicle deliveries are expected from the company in 2021. Should a hotter-than-expected pace carry forth, especially in higher-growth regions like China (which has reported some consumer experience issues of late), we might expect this guidance to increase. At that point, Tesla’s -2% performance following its Q1 release may actually gain momentum in a positive direction.
Then again, Tesla shares are already trading at beyond-peak valuation, with a price-to-earnings ratio of 170x. Tesla shares are flat year-to-date, though +360% from a year ago. CEO Elon Musk usually relishes presenting his company’s performance during quarters like this, and often can massage extra support from investors based on his longer-term plans. We don’t see much reason for him to change the formula this time around.
During the regular trading session today, Apple (AAPL - Free Report) announced a new direct-spending program of $430 billion over the next five years, including a new billion-dollar engineering campus breaking ground in North Carolina. As tech stocks with deep production ties to China and elsewhere in the Far East continue to receive political flak from not providing opportunities here at home, Apple’s solution appears to be making new investments in its home country through 2026.
The company says it will have “10’s of billions of dollars” for next-generation silicon development, 5G, etc. Apple will engage in direct spending programs with more than 9000 suppliers in the U.S. alone, providing 3000+ new jobs in machine learning, A.I. and software engineering. Shares of the world’s largest gadget maker are flat on the news; fiscal Q2 earnings results are expected this Wednesday afternoon, after the closing bell.
Questions or comments about this article and/or its author? Click here>>
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>