Tesla jump starts the busiest week of earnings season. What to expect?

Apr. 26, 2021 5:02 AM ETTesla, Inc. (TSLA)TSLABy: Yoel Minkoff, SA News Editor132 Comments
  • Earnings season will kick into high gear this afternoon as Tesla (NASDAQ:TSLA) reports Q1 results. The EV automaker has already seen record sales in the first quarter, delivering nearly 185,000 vehicles, but it will need to convince investors that it can hold on to its lead in an increasingly crowded playing field. The stock is flat YTD, after jumping over 700% in 2020, and shares have a long history of volatile moves on earnings day.
  • By the numbers: Wall Street expects impressive growth for non-GAAP earnings per share, which could soar 208% Y/Y to $0.77, while revenue forecasts are optimistic, with consensus estimates standing at $10.3B, or a Y/Y increase of 72%. Gross margins are also on watch. Model refreshes and stalling production of the higher-priced Model S and X during the quarter may see margins slip further, after falling to 24.1% in Q4, from 27.7% in the prior period.
  • Headwinds? Recent negative headlines from China (malfunction protests and a military complex ban), as well as a crash in Texas (that seemed erroneously connected to Autopilot), are likely to come up in the conference call. There's also risk that as traditional automakers drive on to the EV scene, they'll need to buy fewer regulatory credits from Tesla to keep in line with emissions rules. While the credits are a small source of revenue, they can help bolster profits since there are no costs associated with them.
  • Outlook: While Tesla has not yet provided a specific vehicle delivery estimate for 2021, it could be a lofty number. Tesla's vehicle deliveries already grew 36% to nearly half a million in 2020, and Technoking Elon Musk has commented that the company could see an annual growth of 50% or more this year. Investors are also hoping for comments surrounding Tesla's new plants in Germany and Austin, Texas, and other growth forecasts, as Tesla continues to roll out its international expansion.
  • Research by Cars.com indicates that Americans' interest in electric vehicles is on the rise with 66% of the respondents in national survey stated an increased desire to buy an EV.

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