What to Expect From Tesla Earnings

Tesla Motors Inc. (NASDAQ: TSLA) is scheduled to report its third-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for a net loss of $0.50 per share on $1.26 billion in revenue. The same period from the previous year had $0.02 in earnings per share (EPS) on $932.35 million in revenue.

The company designs, develops, manufactures and sells electric vehicles, electric vehicle powertrain components and stationary energy storage systems in the United States, China, Norway and elsewhere. It also provides development services to develop electric vehicle powertrain components and systems for other automotive manufacturers. The company sells its products through a network of Tesla stores and galleries, as well as via the Internet.

Jefferies did a deep dive on the company’s battery strategy and found that changes to cell chemistry and the Gigafactory could reduce battery costs by 50% by 2020, resulting in a 10% gross margin lift. Tesla also makes cars like the $35,000 Model 3, which some on Wall Street think can vault the company into the mainstream, a viable product. The analysts raise their 2020 vehicle gross margin estimates and also lift the price target for the stock.

When Tesla reported second-quarter results in August, the company said it planned to ship just over 12,000 vehicles in the third quarter, including “a small number of Model X deliveries.” The full-year target for deliveries was softened somewhat, from a previously announced 55,000 units to a new range of 50,000 to 55,000 units.

For the first three quarters of 2015, Tesla has delivered 33,157 vehicles, and it really does seem unlikely that the company will reach its announced delivery targets for the year.

A few analysts weighed in on Tesla ahead of its earnings report:

  • Robert Baird reiterated a Hold rating with a $282 price target.
  • JPMorgan reiterated an Underweight rating with a $180 price target.
  • Barclays has a Sell rating.
  • Pacific Crest reiterated a Hold rating.

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So far in 2015, Tesla has underperformed the broad markets. With practically all its loss in just the past quarter alone, the stock is down 7% year to date. However, over the past quarter the stock is down over 20%, though in the past 52-weeks the stock is only down 13%.

Shares of Tesla were trading up more than 3% at $213.54 midday Monday, with a consensus analyst price target of $289.19 and a 52-week trading range of $181.40 to $286.65.