Investor's Corner
Tesla Q1 2020 earnings call: What Wall St is expecting
Tesla (NASDAQ: TSLA) is set to release its Q1 2020 financial results after markets close tomorrow, April 29, 2020. Following the release of its first-quarter Update Letter, the electric car maker is scheduled to hold its earnings call, which will begin at 3:30 p.m. Pacific Time (6:30 p.m. Eastern Time).
Expectations are higher for Tesla for the first quarter of 2020 despite an extended shutdown of the company’s Fremont, Giga Nevada, and Giga New York facilities in the United States. TSLA stock has more than doubled in value since dipping below $400 per share in March, and the 88,400 vehicle deliveries for Q1 were above Wall Street’s estimates of 75,000-80,000.
REVENUE
Analysts polled by FactSet currently expect Tesla to post a revenue of $6.11 billion. In contrast, Tesla reported revenue of $7.38 billion in Q4 2020, beating Wall Street estimates of $7.047 billion. The company’s revenue is up 35% annually, according to the financial agency.
EARNINGS
Tesla’s strong Q4 2019 saw an earnings per share of $2.14 for TSLA stock. On the other hand, Q1 2019 saw a loss of $2.90 per share. In comparison, analysts expect a GAAP EPS of -$0.90 and non-GAAP EPS of -$0.27 for Q1 2020, as noted in a report from The Street.
FREE CASH FLOW
The consensus among analysts polled by FactSet for Tesla’s free cash flow (FCF) for Q1 2020 is negative $329 million. In comparison, Tesla posted $1.013 billion of free cash flow for Q4 2019. Analysts believe the company’s shutdown of its Fremont factory and COVID-19’s unquestionable impact on production and deliveries will result in significant cash burn.
UPDATES FOR ONGOING PROJECTS
CEO Elon Musk mentioned in March that the company would be looking to build a new Gigafactory within the United States that would be intended for the production of the Cybertruck. Musk plans to produce the Model Y at this upcoming factory as well, which will decrease delivery times for customers in the Eastern sections of the country.
Tesla has plenty of projects going on despite the halt in production in the United States. In China, the Model 3 is quickly becoming one of the most popular vehicles, especially after the car posted a 450% increase in registrations from February to March. This statistic is implicating the overwhelming demand for the vehicle is rising as Tesla begins to offer additional configurations of the affordable sedan, as well as new interior options.
Giga Shanghai was subjected to a shutdown following the Chinese New Year, but Tesla initiated a number of safety measures that aimed to keep employees safe and healthy. Giga Shanghai has since reopened and is currently producing an estimated 3,000 Model 3 per week.
During its January forecasting, Tesla stated its solar and energy storage deployments would expand by “at least 50%” during 2020. With Giga New York closed for solar production, this figure may need to be revised, especially considering the fact that the state of New York has been hit hard by the coronavirus.
However, the site could reopen for ventilator production, as Medtronic and Tesla reached an agreement to begin manufacturing ventilators at the production facility in Buffalo, New York in March.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Tesla receives major institutional boost with Nomura’s rising stake
The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Tesla (NASDAQ:TSLA) has gained fresh institutional support, with Nomura Asset Management expanding its position in the automaker.
Nomura boosted its Tesla holdings by 4.2%, adding 47,674 shares and bringing its total position to more than 1.17 million shares valued at roughly $373.6 million. The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Institutional investors and TSLA
Nomura’s filing was released alongside several other fund updates. Brighton Jones LLC boosted its holdings by 11.8%, as noted in a MarketBeat report, and Revolve Wealth Partners lifted its TSLA position by 21.2%. Bison Wealth increased its Tesla stake by 52.2%, AMG National Trust Bank increased its position in shares of Tesla by 11.8%, and FAS Wealth Partners increased its TSLA holdings by 22.1%. About 66% of all outstanding Tesla shares are now owned by institutional investors.
The buying comes shortly after Tesla reported better-than-expected quarterly earnings, posting $0.50 per share compared with the $0.48 consensus. Revenue reached $28.10 billion, topping Wall Street’s $24.98 billion estimate. Despite the earnings beat, Tesla continues to trade at a steep premium relative to peers, with a market cap hovering around $1.34 trillion and a price-to-earnings ratio near 270.
Recent insider sales
Some Tesla insiders have sold stock as of late. CFO Vaibhav Taneja sold 2,606 shares in early September for just over $918,000, reducing his personal stake by about 21%. Director James R. Murdoch executed a far larger sale, offloading 120,000 shares for roughly $42 million and trimming his holdings by nearly 15%. Over the past three months, Tesla insiders have collectively sold 202,606 shares valued at approximately $75.6 million, as per SEC disclosures.
Tesla is currently entering its next phase of growth, and if it is successful, it could very well become the world’s most valuable company as a result. The company has several high-profile projects expected to be rolled out in the coming years, including Optimus, the humanoid robot, and the Cybercab, an autonomous two-seater with the potential to change the face of roads across the globe.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
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