Investor's Corner
Tesla’s (TSLA) Q2 2019 earnings call: Here are Wall Street’s estimates
Tesla (NASDAQ:TSLA) is poised to hold its second-quarter earnings call after the markets close on Wednesday. With the electric car maker exceeding expectations on its vehicle production and deliveries, all eyes are now on the company as it tries to return to profitability, which it was able to achieve in the third and fourth quarter of 2018.
Bill Selesky, an analyst with Argus Research, stated that the story of Tesla’s second-quarter immediately changed when it reported its production and delivery figures, which exceeded expectations. “We are still hearing that demand trends bode well for Tesla. What remains to be seen is whether Tesla will rein in its costs and expenses and improve its margins,” he said.
Garrett Nelson, an analyst with CFRA Research, noted that investors would likely be focused on whether the company will keep its initial forecast of selling 360,000-400,000 vehicles in 2019. “The ability of the stock to move higher will really depend on the (sales) guidance. We are still skeptical that they will hit that goal,” the CFRA analyst stated.
Overall, analysts polled by FactSet expect Tesla to report an adjusted quarterly loss of $0.39 per share, a notable improvement over the $3.06 loss the company reported in Q2 2018. Wall Street also expects Tesla to return to non-GAAP profitability by the fourth quarter.
Estimize, a crowdsourcing platform that aggregates estimates from Wall Street analysts, buy-side analysts, company executives, fund managers, academics and others, has noted that it expects Tesla to report an adjusted loss of $0.25 per share.
As for revenue, FactSet expects Tesla to report sales of $6.5 billion in the second quarter, an improvement over the $4 billion the company reported in Q2 2018 and the $4.5 billion in the first quarter. Estimize, for its part, expects Tesla to report sales of $6.6 billion.
Tesla has been on what appears to be a path towards recovery in July. TSLA shares have recovered 14% this month, following a 21% recovery in June. Due to the steep drop in the electric car maker’s shares following the first quarter, Tesla remains down 23% for 2019. This compares unfavorably with the S&P 500 index and the Dow Jones Industrial Average, which have gained 19% and 17%, respectively.
Selesky’s statement about the Tesla story changing with the results of the second-quarter vehicle production and delivery report mirrors the sentiments of some of the company’s supporters in Wall Street. In a recent note, for example, Baird analyst Ben Kallo stated that Tesla’s further execution, starting with its second-quarter earnings report, will “help restore credibility and create a challenging short environment” despite the “overly negative” narrative surrounding the company.
Even Barclays analyst Brian Johnson, a Tesla bear, has issued a note stating that he sees the electric car maker heading to a nearly profitable Q2 earnings report. “Increasing 2Q estimates as TSLA did indeed ‘move the metal,’” Johnson wrote.
As of writing, Tesla stock is trading +0.84% at $260.36 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
Tesla stock closes at all-time high on heels of Robotaxi progress
Tesla needs to come through on this one Robotaxi metric, analyst says
