What to Watch When Tesla Reports After the Close

Tesla Inc. (NASDAQ: TSLA) is scheduled to release its most recent quarterly results after the markets close on Wednesday. For the quarter, the consensus estimates are a net loss of $0.42 per share and $6.33 billion in revenue. The third quarter of last year reportedly had a net loss of $2.90 per share and $6.82 billion in revenue.

Earlier this month, Tesla reported that the company delivered approximately 97,000 vehicles in the third quarter, a record high. The company also said it produced 96,155 vehicles in the quarter, another record high.

Tesla’s performance did not live up to CEO Elon Musk’s “shot” at a target of 100,000 deliveries, and the stock was punished for missing a goal it never really set. Maybe one day Musk will catch on that words have meaning and will be a little more circumspect in what he says. Or maybe not.

The mix of deliveries and production tilted heavily toward the Model 3, Tesla’s least expensive model. The company built 79,837 of the vehicles in the quarter and delivered 79,600. Production of the Models S and X totaled 16,318 and deliveries totaled 17,400.

The company also reported that it received “record net orders in Q3 and [is] entering Q4 with an increase in [its] order backlog.” At the end of the second quarter, Tesla also increased its backlog but realized a decline in deposits paid as the company worked through its order backlog. That sequential decline in customer deposits diminished year-over-year cash flow by about $160 million.

Tesla has guided full-year deliveries of 360,000 to 400,000 vehicles. Including the third-quarter total, the company has delivered 255,370 vehicles, leaving a fourth-quarter target of 104,630 deliveries to meet the low-end of the company’s guidance. If Tesla can hit even 100,000 deliveries in the fourth quarter, the total would reflect a 45% year-over-year increase.

Overall, Tesla has underperformed the broad markets, with its stock down about 23% year to date. In the past 52 weeks, the stock is down closer to 2%.

A few analysts weighed in on Tesla ahead of the report:

  • Wedbush has a Hold rating and a $220 price target.
  • RBC has a Sell rating with a $190 target price.
  • Jefferies has a Buy rating with a $300 price target.
  • Oppenheimer rates it as Buy with a $356 price target.
  • Credit Suisse’s Sell rating comes with a $189 price target.
  • JPMorgan has a Sell rating with a $200 target price.

Shares of Tesla traded at $255.52 on Wednesday, in a 52-week range of $176.99 to $379.49. The consensus price target is $245.63.