Finny logo
Finny logo

Tesla (TSLA) earnings preview: trouble with the mass market?

12:37 am ET, 31 Jul 2018

Tesla Motors, Inc. (TSLA) is expected to report earnings on August 1 after market close. The report will be for the fiscal quarter ending June 2018. Shares are trading at 297.43, down -1.9%.

 What are TSLA earnings expectations?  What news should investors be paying attention to?

Investors are spooked by the comments CEO Elon Musk made in a Bloomberg interview on July 13. While speaking about the Model 3 as a "bet-the-company" situation, given the large step-up in production required, Musk said, "Once we break through to mass-market cars, where mass-market is on the order of a quarter million vehicles per year, I cannot see us doing a 1.2-million-vehicle program of one particular model." Given that Musk was talking about mass-market volume at around 250,000 units a year, some analysts judged that his comment above meant that the Model 3 will never be close to the range of 1.2 million annual units, causing them to revise their forecasts for the company.  

What Tesla will look like 10 years from now is still highly uncertain. Over time some of the Model 3 demand may move to other variants such as the Model Y crossover derived from the Model 3 platform, or to vehicles not yet announced, such as a pickup truck and a compact car. Tesla's mass-market ambitions over the next decade may be much smaller than analysts had previously thought, which causes a concern for some investors.  

Also noteworthy is that The Wall Street Journal reported that Tesla has made a request of some suppliers to refund payments for parts back to 2016 in order to help Tesla become profitable. Automakers often have brutal pricing demands on suppliers for future work, but retroactive rebates are not common in the industry and sound troubling to investors.

Tesla Inc. has a mixed history of beating analysts’ earnings estimates.  In the past four quarters, the company: 

  • Beat analyst EPS estimates by 57 cents ($-1.33 actuals vs. $-1.90 forecast) in FQ2’17;
  • Missed analyst EPS estimates by 50 cents ($-2.92 actuals vs. $-2.42 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 15 cents ($-3.04 actuals vs. $-3.19 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 2 cents ($-3.35 actuals vs. $-3.37 forecast) in FQ1’18.

For FQ2’18, EPS is expected to decline by 103% year-over-year to $-2.70, while revenue is expected to grow 38% year-over-year to $3.86 billion. 

Over the last month, Tesla Motors (TSLA) returned -10.85%.

Tesla Motors, Inc. (TSLA) average analyst price target ($312.32) is 5.01% above its current price ($297.43).

For the latest price and information on Tesla Motors, Inc., please visit Finstead and search for "TSLA price" or "TSLA news".

GM: Will The Stock Move Higher?

2:53 pm ET, 09 Apr 2018

The General Motors (NYSE: GM) stock moved up about 1% today. The automaker lost some value in the broader market correction.  What is the forecast for this stock? 

Here is what you need to know about GM today (for the latest stock news go to Finstead and type 'GM news').

The company has witnessed a lower sales growth. 79 million cars were sold in 2017.  The company forecasted 81.6 million for 2018, which is just a 3.3% rise. The domestic auto market in the US is in an almost stagnant condition since 2015.

Though China is a huge automotive market, it doesn't have much-needed consistency. Also, President Trump's geopolitical play might further destabilize the General Motors stock.

Tesla's incident involving a deadly crash (because of its autopilot feature) has caused a negative impact on the whole auto sector

GM incurred an $8.1 Billion R&D expenditure last year, which was the highest in the world. This was done to pursue the industry opportunity. But the driverless vehicle is preferred by only about a half of various surveys’ respondents. Consumers’ negative perception of the driverless car can definitely cause the GM stock to further decline.

The declining demand for the Spark minicar led the Company to a decision to replace it with a crossover. Spark faced a 36% dip in sales in the US market alone last year.

In February, GM had plans to shut down a South Korean factory and consider 3 other plants' operational viability in the region. The South Korean government's support and concessions for its local union are the factors on which the crossover production plan depends (this model is tapped for production in 2020).

What are the chances of the GM stock climbing further up? Per Finstead Research, the GM stock has an average price target of almost $49. It has an upside of around 28%.

The General Motors stock has a fairly low valuation. Its forward P/E ratio is ahead of that of FCAU but behind those of PCAR, OSK, and WBC.   

Elon Musk's Stock Options: Good or Bad for Tesla (TSLA)?

4:27 pm ET, 21 Mar 2018

Tesla's shares are up by 2% today, almost wiping off the losses for the year.

Elon Musk got what he asked for today: the shareholders approved to grant him stock options worth $2.6 Billion. This will be possible if Tesla manages to sustain its growth trajectory in the upcoming years.

Some of the Tesla's major investors are of the opinion that the award is necessary for gearing up the business. Per new plan, the options will be earned for the fulfillment of goals related to the market value, revenue, and earnings

In order for Musk to get all the options, Tesla's market cap has to be $650 Billion, which is more than Facebook’s market cap, and its revenue has to be more than P&G’s revenue. If Tesla succeeds in accomplishing those goals, Musk will get more than $50 Billion in equity grants.

Some critics hold a negative opinion towards this plan because it increases the company's expenses and dilutes the existing shareholders' stake. Musk's involvement in various other projects creates concerns around his lack of commitment to Tesla, but the award ensures he’d be in a driving seat for a decade.

Finstead doesn’t predict much of an upside for Tesla's price.  According to Finstead research, Tesla’s average price target is around $317.

Tesla’s valuation is negative because the company is not profitable. Trading shares of unprofitable companies is a highly speculative activity.

Tesla's Short Share of Float is higher than the average for the industry which means the share price is likely to be volatile. 

Over the last year, TSLA returned +18.57%. This return is higher than the Auto Manufacturers sector (8.97%), Consumer Goods industry (5.13%), and S&P 500 (14.47%) returns.

Tesla: What You Need To Know Prior To Earnings Results Today

1:08 pm ET, 07 Feb 2018

Tesla (NASDAQ: TSLA) is up 2% mid-day today ahead of its earnings report post market close.  Based on Finstead research, TSLA price target upside is -9.04% (visit Finstead and type "TSLA upside").   

Here are some things you should know about Tesla prior to the earnings release. 

Tesla is far away from a profitable company.  Per Elon Musk, profits can be realized only after Model 3 enters full-scale production. Investments in new vehicles development, technologies, and retail network build-out are the reasons for anticipating losses.

Production bottlenecks have led Tesla to miss its target of 1500 Model 3s in 2017.  Tesla's dependency on a single source to obtain components is limiting its production capacity.

The lithium-ion battery also remains a problem.

In order to meet the demand and sustain high growth, Tesla is investing in Model X and Model 3 development, Gigafactory construction, sales expansion, as well as building supercharger infrastructure.

Investors continue to be dubious regarding Tesla's SolarCity acquisition as they feel that the debt and cash flows of SolarCity would further deteriorate Tesla’s financial position. The acquisition of SolarCity has prompted 4 Tesla shareholders to file lawsuits against it, which will likely result in increased expenses (e.g., costs related to the indemnification of the directors) for Tesla.

The prohibition of direct sales by automakers and mandatory use of franchised dealers in certain U.S. states negatively impacts Tesla’s sales.  Tesla employs direct sales only.

Relatively high prices of Tesla models have resulted in low market penetration.  Fixed expenses such as marketing costs and R&D increases are becoming more pronounced because of the reduced sales volume. High operational expenses make Tesla look vulnerable compared to large-scale manufacturers such as General Motors and Ford.

The absence of sufficient charging points is a major hindrance for the potential buyers—and that impacts the international expansion of Tesla.

Over the last year, TSLA returned +32.55%.  This return is higher than Auto Manufacturers industry (20.38%), Consumer Goods industry (7.65%), and S&P 500 (15.30%) returns.

Tesla Motors, Inc. (TSLA) Stock Guide

Updated at: 5:50 pm ET, 18 Sep 2020

Before we start: if you're looking for TSLA stock price, you can quickly find it out by visiting Finny and typing "TSLA quote". If you're looking for a quick scoop on TSLA stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "TSLA". You'll get all this info in one place. Or you can just type "TSLA news" to get the latest stock news.

Looking to buy or sell Tesla Motors, Inc. (TSLA)? Interested in getting the full scoop on TSLA, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this TSLA stock guide, we'll address key questions about TSLA, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are TSLA earnings?
2. What is TSLA stock forecast (i.e., prediction)?
3. TSLA buy or sell? What is TSLA Finny Score?
4. What are the reasons to buy TSLA? Why should I buy TSLA stock?
5. What are the reasons to sell TSLA? Why should I sell TSLA stock?
6. What are TSLA key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are TSLA earnings?

TSLA trailing 12-month earnings per share (EPS) is $0.39.

Analyst Predictions

2. What is TSLA stock forecast (i.e., prediction)?

Based on TSLA analyst price targets, TSLA stock forecast is $289.19 (for a year from now). That means the average analyst price target for TSLA stock is $289.19. The prediction is based on 23 analyst estimates.

The low price target for TSLA is $19.00, while the high price target is $550.00.

TSLA analyst rating is Hold.


3. TSLA buy or sell? What is TSLA Finny Score?

#{finnyScore:27}Our quantitative analysis shows 3 reasons to buy and 8 reasons to sell TSLA, resulting in Finny Score of 27.

4. What are the reasons to buy TSLA? Why should I buy TSLA stock?

Here are the reasons to buy TSLA stock:

  • Tesla is the first among automakers in terms of customer satisfaction. 91% of Tesla owners said they would purchase the same vehicle if they had it to do all over again. That result was 7 percentage points ahead of its next closest competitor.
  • Tesla is phenomenal at low-cost marketing. Everything Tesla does is covered in excruciating detail by media outlets, which provides the firm with a great amount of free advertising. Elon Musk personally has over 28 million Twitter followers. It's really easy for Tesla to quickly get the word out when new products are launched and drum up huge amounts of demand (e.g., 400K Model 3 pre-orders).
  • Tesla is a beloved brand. Tesla has been selling products for barely a full decade (the Roadster launched in 2008), but the company has already managed to get onto Interbrand's list of top 100 global brands. The name "Tesla" is already worth billions of dollars.
  • Tesla has the potential to change the world with long-range electric and autonomous vehicle technology, and battery technology that can store solar energy that its products generate.
  • The cost advantage of recharging over gas is significant, and gas will probably never be able to catch up.
  • TSLA stock price ($442.15) is close to the 52-week low ($330.21). Perhaps now is a good time to buy? See TSLA price chart.
  • TSLA PEG ratio (P/E adjusted for growth) is 0.66, which is low compared to its industry peers’ PEG ratios. See TSLA PEG chart.
  • TSLA cash to debt ratio is 0.56, higher than the average industry (0.06) and sector (0.13) cash to debt ratio. See TSLA cash to debt chart.

5. What are the reasons to sell TSLA? Why should I sell TSLA stock?

Let's look at the reasons to sell TSLA stock (i.e., the bear case):

  • Tesla is facing supply chain problems which are restricting its ability to increase production. Since it depends on single-source suppliers for many components, the inability of these suppliers to increase volume to meet Tesla’s rising demand limits the automaker’s expansion and capacity augmentation plans.
  • Other factors affecting Tesla’s results are high research and development (R&D) and selling, general and administrative (SG&A) expenses. Tesla is investing heavily in increasing production capacity, the development of new models, and the Gigafactory construction. It is also expanding sales, services and Supercharger infrastructure.
  • Investors are skeptical of Tesla’s SolarCity purchase, since the company is already struggling to cut its losses. Investors believe that the problem may be further exacerbated by the addition of SolarCity’s losses. Moreover, the addition of the SolarCity's debts and cash outflows will increase the strain on Tesla’s financials.
  • Tesla caters to a niche market segment. Apart from the limited demand for electric cars, the high prices of the company’s cars result in low market penetration. Moreover, the low sales volume leads to a high per car cost for fixed expenses such as marketing costs and R&D expenses.
  • The low number of charging stations is a deterrent for potential buyers of Tesla. Although the company is working toward developing a supercharging network, the number of charging stations still remains drastically low compared with gasoline stations. Thus, Tesla car owners, particularly the owners of the lower-range version, have to take significant detours to charge batteries.
  • Investing in Tesla carries tremendous uncertainty. The market has high expectations for the stock, so a slowdown in growth, execution problems, or Elon Musk's erratic behavior could lead to a severe decline in the stock price.
  • TSLA quarterly revenue growth was -4.90%, lower than the industry and sector average revenue growth (0.03% and 0.78%, respectively). See TSLA revenue growth chart.
  • TSLA profitability is declining. The YoY profit margin change was -7.04 percentage points. See TSLA profitability chart.
  • TSLA forward P/E ratio is 154.24, which is high compared to its industry peers’ P/E ratios. See TSLA forward P/E ratio chart.
  • TSLA Price/Book ratio is 44.83, which is high compared to its industry peers’ P/B ratios. See TSLA forward Price/Book ratio chart.
  • TSLA Price/Sales ratio is 17.22, which is high compared to its industry peers’ P/S ratios. See TSLA forward Price/Sales ratio chart.
  • TSLA average analyst price target ($289.19) is below its current price ($442.15). See TSLA price target chart.
  • TSLA short share of float is 8.28%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See TSLA short share of float chart.
  • TSLA Enterprise Value/Revenue multiple is 17.54, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See TSLA Enterprise Value/Revenue chart.

Key Stats

6. What are TSLA key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for TSLA:

Metrics TSLA
Price $406.34
Average Price Target / Upside $308.83 / -24.00%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Auto Manufacturers
Sector Consumer Cyclical
Number of Employees 48,817
Market Cap $429.84B
Forward P/E Ratio 141.07
Price/Book Ratio 16.72
Revenue (TTM) $25.71B
YoY Quarterly Revenue Growth -4.90%
Profit Margin 1.43%

If you liked this analysis, check out Stock Guides for other stocks.

Follow Us