Investor's Corner
Tesla Q4 Earnings expectations boost stock two days before call
Tesla (NASDAQ: TSLA) spiked in early trading hours during Monday’s session based on expectations that the automaker could deliver its sixth-consecutive profitable quarter.
On January 2, Tesla released Delivery and Production figures for Q4 2020, indicating the company’s biggest quarter to date. With 180,570 deliveries and 179,757 cars produced, Tesla attained its 2020 production guidance but fell short of its delivery goal by 450 cars. This figure could be revised on Wednesday; the company indicated in its Delivery and Production report figures could vary by .5%.
Nevertheless, the strong figures have analysts and investors keen on Tesla delivering strong financial figures during the company’s Q4 2020 Earnings Call that will occur on Wednesday after market close. If the company reports positive figures, it will mark the sixth-straight quarter of profitability, and many are convinced it will happen based on the strong figures it announced for Q4 2020.
Monday morning’s session started Tesla stock at $846.64, but the automaker’s strong expectations had already made a considerable mark by 11 am EST. Tesla stock surged to over $900 at 10:02 am, reaching an all-time high of $900.39.
With the Earnings Call expectations solidified, Tesla investors are convinced CEO Elon Musk and others could reveal some relatively significant announcements. Some believe Tesla could finally announce the “Refresh” of its all-electric flagship sedan: the Model S. Teslarati released exclusive photographs of a Model S “Refresh” candidate spotted at Tesla’s Fremont Factory earlier this weekend, sporting some new exterior cosmetic features. Tesla has kept these developments under wraps, but there are some suspicions that the new vehicle could be announced during Wednesday’s call.
Additionally, Tesla has been releasing some new videos of its 4680 battery cell production lines and Model Y and Model 3 stamping processes, showing refined and rejuvenated manufacturing efforts. This is an offensive that Tesla has focused on for several years, especially as Musk and Tesla narrow in on a 1 million vehicle annual production rate. This goal is coming closer to reality through a series of manufacturing efficiencies and the introduction of new production plants in Europe and the United States.
Tesla’s China-based production facility, Giga Shanghai, has started producing and delivering the all-electric Model Y crossover. The car sold out quickly and deliveries are already backed up into Q2, Tesla’s website says. China’s strong thirst for Tesla EVs has played a positive role in the company’s reputation as the most-popular electric carmaker in the world, along with its increasing international presence.
Tesla stock surged over 700% in 2020 and is up another 16% so far in 2020. As the surge in stock price continues, Tesla focuses on increasing overall production, refining its self-driving infrastructure, and helping the world transition to sustainable transportation in a timely manner.
Tesla will report its Q4 2020 Earnings Call on Wednesday, January 27th at 3:30 pm PST, or 6:30 pm EST. At the time of writing, Tesla stock was trading at $862.04.
Disclosure: Joey Klender is a TSLA Shareholder.
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.
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