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Tesla (TSLA) Down 3.1% Since Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Tesla, Inc. (TSLA - Free Report) . Shares have lost about 3.1% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is TSLA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Tesla Earnings Beat in Q1, Revenues Improve Y/Y

Tesla incurred an adjusted loss of $3.35 per share in first-quarter 2018, narrower than the Zacks Consensus Estimate of the loss of $3.37. The company reported loss of $1.33 per share in the prior-year quarter.

The reported net loss in the quarter under review was $784.6 million compared with the year-ago net loss of $397.2 million.

Revenues increased to $3.41 billion from $2.70 billion registered in first-quarter 2017. The figure surpassed the Zacks Consensus Estimate of $3.17 billion.

Tesla produced 34,494 vehicles in first-quarter 2018, up 40% sequentially. This happens to be the most productive quarter in the history of Tesla. Out of total vehicles produced, 24,728 were Model S and Model X while 9,766 were Model 3. Also, during the reported quarter, the company delivered 29,997 vehicles which including 21,815 Model S and Model X vehicles along with 8,182 Model 3 vehicles.

Total automotive revenues, which include revenues from automotive sales and leasing, increased 19% year over year to $2.74 billion in the reported quarter. The rise was due to Model 3 deliveries and the adoption of new accounting standards.

Energy generation and storage revenues soared from $213.9 million in first-quarter 2017 to $410 million in the reported quarter. The rise was mainly due to considerable growth of energy-storage deployments.

Services and other revenues increased 37% year over year, primarily due to higher used-car sales.

Tesla’s first-quarter 2018 automotive gross margin was 18.8%, declining 904 basis points (bps) from first-quarter 2017.

Energy generation and storage gross margin declined 2,061 bps on a year-over-year basis to 8.5%.

Financial Position

Tesla had cash and cash equivalents of $2.67 billion as of Mar 31, 2018, compared with $3.37 billion, as of Dec 31, 2017.

Net cash used in operating activities amounted to $398.4 million in first-quarter 2018 compared with net cash provided of $509.9 million in fourth-quarter 2017. Capital expenditures jumped to $655.7 million from $552.6 million in the year-ago quarter.

Business Expansion

In first-quarter 2018, Tesla opened nine new stores and service locations. The company also opened 77 new Supercharger locations, reaching the global total to 1,205.

Model 3 Update

During the second half of first-quarter 2018, Tesla made solid progress in Model 3 production and has been able to carry this trend into second-quarter 2018. In the prior week of this earnings release, the company produced 2,270 Model 3 and 2,024 Model S and Model X vehicles, setting a new record. The company continues to target Model 3 production of about 5,000 per week in about two months.

Outlook

The company expects to shut down production for about 10 days in second-quarter 2018 (including the shutdown in April) to address bottlenecks and raise production.

Tesla expects to deliver around 100,000 units of Model S and Model X in 2018, similar to the prior-quarter guidance.

Energy generation and storage revenues are likely to improve significantly in 2018 due to expanding capacity for Powerwall and Powerpack products at Gigafactory 1.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to six lower.

Tesla, Inc. Price and Consensus

 

Tesla, Inc. Price and Consensus | Tesla, Inc. Quote

VGM Scores

At this time, TSLA has a poor Growth Score of F, however its Momentum is doing a lot better with a C. The stock was also allocated a grade of F on the value side, putting it in the bottom 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, TSLA has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.




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