[ad_1]
Tesla Inc. has the perfect opportunity to answer lingering questions about demand and margins that have brought its stock down lately.
Tesla
TSLA,
is slated to report third-quarter earnings after the bell on Wednesday. Following the results, the electric-vehicle maker is scheduled to update Wall Street analysts on a call that is to be webcast.
Here’s what to watch for in the report.
What to expect
Earnings: Analysts surveyed by FactSet expect Tesla to report adjusted third-quarter earnings of 73 cents a share, compared with adjusted earnings of $1.05 a share in the third quarter of 2022.
Revenue: The analysts polled by FactSet expect revenue of $24.2 billion, higher than the $21.5 billion the company reported in the year-ago period.
Stock movement: Tesla shares have more than doubled so far this year, far outpacing gains of around 14% for the S&P 500
SPX.
That outperformance, however, has evaporated in the past three months, with the stock down more than 11%, versus the S&P’s losses of about 3%.
What else to watch for: That’s because investors have grown increasingly concerned about Tesla’s margins in face of the price cuts, the latest of which were announced earlier this month.
Wall Street will be “laser focused on the margin performance” as well as on Tesla’s outlook for fourth quarter when the company reports its earnings, Wedbush analyst Dan Ives said in a note Tuesday.
See also: Is Bill Ford right? Tesla’s stock is telling a different story.
Tesla earlier this month reported below-expectation quarterly sales numbers. Ives estimated that deliveries of about 20,000 vehicles will be shifted to the end of the year due to longer-than-expected downtimes in factories in Shanghai and in Austin, Texas.
“Even when factoring in the shutdowns with no rose-colored glasses, Tesla clearly missed Street estimates this quarter with bulls left disappointed, although we see better days ahead for [the fourth quarter and 2024],” the analyst said. The “vast majority” of price cuts are in the past, he said.
Other major points of interest are the Model 3, which got a refresh in some areas, and the overall demand outlook, Ives said.
Any word on the Cybertruck, the electric pickup truck Tesla hopes to have for sale by the end of the year, is yet another point of interest, BofA Securities analyst John Murphy said in a note Tuesday.
All in all, “buyside [is] braced for soft result,” Barclays analyst Dan Levy said in a note. Levy estimated gross margins at 17.1%, which would be Tesla’s lowest-gross-margin quarter since the first quarter of 2019, he said.
That “reflects additional price headwinds and relatively weak volumes more than offsetting positive mix and [raw materials] costs benefits,” Levy said.
[ad_2]
Source link
