What to Expect From Tesla Earnings

October 26, 2016 by Chris Lange

Tesla Motors Inc. (NASDAQ: TSLA) is scheduled to report its third-quarter financial results after the markets close on Wednesday. The consensus estimates call for $0.09 in earnings per share (EPS) and $2.35 billion in revenue. The same period of last year reportedly had a net loss of $0.58 per share and revenue of $1.24 billion.

This company delivered 24,500 cars in the third quarter, up 70% over the second quarter. It built 25,185, up 37% over the same period. The Tesla numbers are impressive, but not nearly what is needed to hit the company’s goal of 500,000 deliveries in 2018. Its ability to hit that number will be crucial to answering the question of whether Tesla eventually will be a viable company, and whether it can hold off new electric cars that have started to enter the market.

Among the barriers to reach the 500,000 sales per year is that Tesla needs more money. It is hard to say what the sum will between now and 2018. As Tesla buys SolarCity, founder Elon Musk admitted his treasury is close to empty.

In late August it was presumed that, due to Tesla’s cash burn and its buyout of Solar City, it would need several hundred million by early next year, and perhaps $1 billion by mid-year. Musk said he would not need the money this year. However, that does not mean he won’t need a slug of money early in 2017. Tesla will raise the money, but the prices probably will suffer because of the rising risks that Tesla cannot outpace its competitors.

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

  • Oppenheimer reiterated a Market Perform rating.
  • Robert Baird has a Buy rating with a $338 price target.
  • Citigroup reiterated an Underweight rating.
  • Mizuho reiterated a Positive rating.
  • Morgan Stanley has an Equal Weight rating with a $245 price target.
  • Barclays has a Sell rating with a $165 price target.
  • Goldman Sachs has a Neutral rating with a $185 price target.
  • Global Equities Research reiterated an Overweight rating with a $385 price target.

So far in 2016, Tesla has underperformed the broad markets with the stock down about 16%. Over the past 52 weeks, the stock is down 4.5%.

Shares of Tesla were trading at $200.85 on Wednesday, with a consensus analyst price target of $230.00 and a 52-week trading range of $141.05 to $269.34.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.