Investor's Corner

Tesla’s (TSLA) record Q3 is giving analysts a reason to second-guess expectations

Credit: Tesla

Tesla (NASDAQ: TSLA) will host its quarterly Earnings Call for Q3 2020 on Wednesday, October 21st. With that, analysts at numerous firms across the country are preparing and revising their estimations for the electric automaker’s quarterly call. Colin Rusch of Oppenheimer is one of these analysts.

Previously, Oppenheimer released their Q3 2020 EPS estimates for Tesla in a note to investors on October 6th. On Thursday, Rusch revised his ratings, boosting his predictions for Tesla’s record-breaking quarter, which was its biggest in terms of vehicle production and delivery figures in company history.

Rusch forecasts that Tesla will post an Earnings Per Share of $0.43 for the quarter. This is a considerable boost from the $0.24 estimation that the company posted just three days ago, according to MarketBeat.

Tesla already beat Wall Street’s expectations for deliveries for the quarter with 139,300 cars making it to owners in Q3. However, the EPS shows how profitable the company truly was in during the quarter. EPS is a company’s net profit divided by the number of common shares it has outstanding.

In Q2 2020, Tesla beat Wall Street’s expectations by a considerable margin. The consensus was that Tesla would post a loss in Q2 because of the COVID-19 pandemic, and estimations predicted a loss of $0.14 per share. Tesla posted a profit of $$2.18 per share in the second quarter.

Rusch has been a TSLA bull for several years, and he has been vocal to his investors when buying the company’s stock is concerned. A recent note to Oppenheimer clients revealed that TSLA should be bought “on any near-term weakness.” This statement effectively means that whenever TSLA experiences a slight pullback in value, investors should be buying.

“We are impressed with the ambition of the endeavor and believe this roadmap charts ongoing technology and cost leadership for [Tesla] enabling sales into the entire LDV market,” Rusch’s note said. “While limited details may weigh on shares, we would be buyers on any near-term weakness.”

Tesla’s Q3 2020 Earnings Call will reveal whether the company has turned a profit for the fifth straight time, extending its company recorded. With the record deliveries and production figures already being released, along with numerous updates from CEO Elon Musk that are favorable for the company’s future, there is plenty of momentum shifting in the direction of the all-electric car company.

Disclaimer: Joey Klender is a TSLA Shareholder.

Tesla’s (TSLA) record Q3 is giving analysts a reason to second-guess expectations
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