Tesla’s earnings will be good. What’s more important for the stock?
Tesla is set to report second-quarter earnings on Tuesday evening. Electric vehicle maker Tesla looks set to easily beat Wall Street expectations, but that alone may not be enough to raise its stock price.
Wall Street expects earnings of 61 cents per share and revenue of $24.5 billion for the quarter, according to FactSet.
In the same quarter last year, Tesla reported a profit of 91 cents per share and revenue of $24.9 billion.
Profits are expected to decrease as sales and prices fall.
Tesla delivered about 444,000 vehicles in the second quarter at an average price of $42,500.
In the same period last year, we shipped about 466,000 units at an average price of about $44,000.
Still, the profit estimate of 61 cents per share looks like Tesla could easily beat.
Wall Street expects about 420,000 vehicles to be delivered.
In addition, Tesla sold much more battery storage than expected.
Tesla distributed 9.4 gigawatt hours of battery storage during the quarter.
That’s a record number, with the previous best being 4.1 gigawatt hours in the first quarter of 2024.
9.4 gigawatt hours is equivalent to the amount of electricity that can supply approximately 10,000 U.S. homes in a year.
Tesla stock is reflecting a lot of these positive news.
Tesla shares are up more than 20% this month alone at the start of trading on Monday.
It’s going to take something more than just good quarterly performance to raise the stock price.
Investors probably want CEO Elon Musk to reaffirm that Tesla can ramp up its volume in 2024.
Tesla delivered about 1.8 million vehicles in 2023.
In the first half of 2024, it delivered about 831,000 vehicles, down about 7% year-over-year.
Tesla Should Speed Up To Beat 2023 Figures.
RBC analyst Tom Narayan wrote in a recent preview report: “Management may backtrack on expectations for full-year volume growth, but whether that really matters is questionable.”
He’s more interested in comments about the next generation of electric vehicles that Tesla is set to launch in the first half of 2025.
The vehicle will be produced at Tesla’s existing facility, and is expected to start at around $25,000.
Narayan says the vehicle could boost growth in 2025.
But investors and drivers have yet to see the prototypes.
He rated Tesla Inc TSLA with a Buy rating and set a price target of $227.
Musk may also comment on Tesla’s Robotaxi Day.
The event was originally scheduled for August, but it has been postponed for a few months and will probably be held in October.
The stock fell more than 8% on the day the news of the postponement broke.
Musk’s comments on the progress of introducing self-driving taxis and Tesla’s plans to make money from them will help ease investor anxiety.
Baird analyst Ben Calo recently wrote that investors are expecting Tesla to own and operate some robo-taxi in the second half of 2025.
Early on, it said, the numbers would be small, but success would increase investor confidence in its robo-taxi business model.
Calo rated Tesla Inc TSLA with a Buy rating and set a price target of $280.
Tesla is set to start a conference call at 5:30 p.m. ET on Tuesday to discuss it all.
How Musk handles questions about demand, new products, self-driving cars and other topics will have a big impact on the stock price.
Tesla shares rose 1.2% to $241.99 in premarket trading, while futures for the S&P 500 and Dow Jones Industrial Average rose about 0.4% and 0.1%, respectively.
Barrons
Dow Jones Newswires
07-22-24 0752ET