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
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
-->“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
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.
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