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Here's How Tesla (TSLA) is Placed Ahead of Its Q3 Earnings
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Tesla (TSLA - Free Report) is set to kick off the third-quarter earnings season for the Zacks Auto-Tires-Trucks sector next week. The electric vehicle (EV) behemoth will post quarterly results on Oct 19, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at 95 cents per share and $22.28 billion, respectively.
Tesla surpassed the Zacks Consensus Estimate for earnings in the last reported quarter on higher-than-expected revenues from the Services and Other segment. Over the trailing four quarters, Tesla beat the Zacks Consensus Estimate on all occasions, with the average being 32.2%. This is depicted in the graph below:
But will the company be able to maintain its beat streak this time around as well? While investors are keeping their fingers crossed, an earnings beat doesn’t look too likely for Tesla this time around.
Estimate Revisions
The Zacks Consensus Estimate for third-quarter earnings per share has moved 2 cents south in the past seven days. The bottom-line estimate, however, implies a year-over-year surge of 53.2%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year rise of 62%.
Things to Note
The company delivered 343,830 (325,158 Model 3 and Y, and 18,672 Model S and X) cars worldwide in the third quarter.This is up 42% from the year-ago quarter and 35% from the prior quarter. It also topped the first-quarter record of 310,048 units. However, the number missed Wall Street expectations. Total deliveries also missed the Zacks consensus mark of 354,950 units.
Supply chain snafus and logistics challenges were the primary causes of the delivery miss. As cited by Tesla in its press release “As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks.”
In addition to the deliveries miss, high costs of raw materials and logistical constraints are also expected to have remained pain points. But on a brighter note, Tesla has been benefiting from increasing the average selling price (ASP) of vehicles since it is passing on the burden of escalating input costs to consumers through price hikes across its models. Thanks to rising ASP, we believe that Tesla might have managed to offset most of the production loss and commodity inflationary pressure in the second quarter.
Tesla’s sector top line is also likely to have recorded growth in solar and storage deployments during the quarter, aided by the company’s Solar Roof and Powerwall products. The consensus mark for energy generation and storage revenues is pegged at $910 million, suggesting a yearly increase of 13%. The consensus estimate for revenues for Tesla’s Services and Other segment is pegged at $1,350 million, implying growth from $894 million recorded in the corresponding quarter of 2021.
Overall, while rising prices of Tesla vehicles and the solid performance of the solar arm and the service segment are likely to have aided Tesla’s earnings in the to-be-reported quarter, commodity costs inflation and weaker-than-expected deliveries may have played spoilsports.
What Does Our Model Say?
Our proven model doesn’t conclusively predict an earnings beat for Tesla this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: Tesla has an Earnings ESP of -0.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are a couple of players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Genuine Parts Company (GPC - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 20.
The Zacks Consensus Estimate for Genuine Parts’ to-be-reported quarter’s earnings and revenues is pegged at $2.03 per share and $5.39 billion, respectively. Encouragingly, GPC surpassed earnings estimates in the last four quarters, with the average surprise being 11%.
Polaris Inc. (PII - Free Report) has an Earnings ESP of +0.26% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 25.
The Zacks Consensus Estimate for Polaris’ to-be-reported quarter’s earnings and revenues is pegged at $2.85 per share and $2.19 billion, respectively. PII surpassed earnings estimates in three out of the last four quarters and missed once, with the average negative surprise being 1%.
Image: Bigstock
Here's How Tesla (TSLA) is Placed Ahead of Its Q3 Earnings
Tesla (TSLA - Free Report) is set to kick off the third-quarter earnings season for the Zacks Auto-Tires-Trucks sector next week. The electric vehicle (EV) behemoth will post quarterly results on Oct 19, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at 95 cents per share and $22.28 billion, respectively.
Tesla surpassed the Zacks Consensus Estimate for earnings in the last reported quarter on higher-than-expected revenues from the Services and Other segment. Over the trailing four quarters, Tesla beat the Zacks Consensus Estimate on all occasions, with the average being 32.2%. This is depicted in the graph below:
Tesla, Inc. Price and EPS Surprise
Tesla, Inc. price-eps-surprise | Tesla, Inc. Quote
But will the company be able to maintain its beat streak this time around as well? While investors are keeping their fingers crossed, an earnings beat doesn’t look too likely for Tesla this time around.
Estimate Revisions
The Zacks Consensus Estimate for third-quarter earnings per share has moved 2 cents south in the past seven days. The bottom-line estimate, however, implies a year-over-year surge of 53.2%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year rise of 62%.
Things to Note
The company delivered 343,830 (325,158 Model 3 and Y, and 18,672 Model S and X) cars worldwide in the third quarter.This is up 42% from the year-ago quarter and 35% from the prior quarter. It also topped the first-quarter record of 310,048 units. However, the number missed Wall Street expectations. Total deliveries also missed the Zacks consensus mark of 354,950 units.
Supply chain snafus and logistics challenges were the primary causes of the delivery miss. As cited by Tesla in its press release “As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks.”
In addition to the deliveries miss, high costs of raw materials and logistical constraints are also expected to have remained pain points. But on a brighter note, Tesla has been benefiting from increasing the average selling price (ASP) of vehicles since it is passing on the burden of escalating input costs to consumers through price hikes across its models. Thanks to rising ASP, we believe that Tesla might have managed to offset most of the production loss and commodity inflationary pressure in the second quarter.
Tesla’s sector top line is also likely to have recorded growth in solar and storage deployments during the quarter, aided by the company’s Solar Roof and Powerwall products. The consensus mark for energy generation and storage revenues is pegged at $910 million, suggesting a yearly increase of 13%. The consensus estimate for revenues for Tesla’s Services and Other segment is pegged at $1,350 million, implying growth from $894 million recorded in the corresponding quarter of 2021.
Overall, while rising prices of Tesla vehicles and the solid performance of the solar arm and the service segment are likely to have aided Tesla’s earnings in the to-be-reported quarter, commodity costs inflation and weaker-than-expected deliveries may have played spoilsports.
What Does Our Model Say?
Our proven model doesn’t conclusively predict an earnings beat for Tesla this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: Tesla has an Earnings ESP of -0.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Tesla currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With the Favorable Combination
Here are a couple of players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Genuine Parts Company (GPC - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 20.
The Zacks Consensus Estimate for Genuine Parts’ to-be-reported quarter’s earnings and revenues is pegged at $2.03 per share and $5.39 billion, respectively. Encouragingly, GPC surpassed earnings estimates in the last four quarters, with the average surprise being 11%.
Polaris Inc. (PII - Free Report) has an Earnings ESP of +0.26% and a Zacks Rank #3. The stock is slated to report third-quarter 2022 earnings on Oct 25.
The Zacks Consensus Estimate for Polaris’ to-be-reported quarter’s earnings and revenues is pegged at $2.85 per share and $2.19 billion, respectively. PII surpassed earnings estimates in three out of the last four quarters and missed once, with the average negative surprise being 1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.