Tesla Inc.’s second-quarter results come amid yet another massive stock recovery, which is now more expensive than shares in Google’s parent company Alphabet Inc. and other consistently profitable heavyweights.
The Silicon Valley automaker is expected to report quarterly numbers next Wednesday after the bell. An analyst call will follow at 5:30 pm ET.
Tesla TSLA,
Monday’s shares were headed for another record. The recovery has quadrupled the share price this year and has increased the market value of the electric car maker to $ 325 billion.
That makes Tesla the most valuable car company in the world after Japan’s Toyota Motor Co.TM,
which sold more than 10 million vehicles last year, including 2.4 million in North America.
Do not missTesla at $ 2,000 is a new ‘case of bulls’ for Morgan Stanley
Wall Street is asking for GAAP and adjusted quarterly losses for Tesla’s second quarter, but that has not mitigated hopes that Tesla could surprise the markets with a quarterly gain, which would put stocks on track to join the S&P 500 index. in three to six months. . One of the criteria for inclusion in the index is GAAP performance for four consecutive quarters.
Joining a major index would take Tesla stocks to the portfolios of thousands of index tracking funds, and send managed funds to catch up as well.
Here is what you can expect:
Profits: The consensus of 33 Wall Street analysts surveyed by FactSet calls for a GAAP loss of $ 1.34 cents per share, which would compare to a GAAP loss of $ 2.31 per share in the first quarter of 2019. Analysts expect an adjusted loss of 58 cents a share, which would compare to an adjusted loss of $ 1.12 a share a year ago.
Estimize, a crowdsourcing platform that brings together estimates from Wall Street analysts, as well as buy analysts, fund managers, company executives, academics, and others, expects an adjusted profit of 6 cents a share.
Income: Analysts polled by FactSet expect sales of $ 4.8 billion for Tesla, down from $ 6.4 billion a year ago. Estimize sees revenue of $ 5.4 billion for the company.
Movement of values: So far this year, Tesla shares have gained 300%, a stark contrast with losses of around 7% for the DIA Jones Industrial Average DJIA,
and breakeven point for the S&P 500 SPX index,
in the same period
What else to expect: A clearer picture of the impact of the coronavirus pandemic on the company is likely to emerge with the quarterly results.
For most of the three-month period, the only Tesla car manufacturing factory in the United States in Fremont, California, closed (and became a point of contention between Chief Executive Elon Musk and local health authorities , with the factory reopening against shutdown orders), with production from the Tesla factory in Shanghai offsetting some of the effects of the Fremont shutdown.
The stock recovery, which began in December, most recently accelerated after the company earlier this month reported better-than-expected second-quarter sales without Fremont at full speed.
Stock valuation is likely to be “out of line with traditional valuation metrics,” Evercore ISI analysts said in a note Monday.
Tesla could “use it as a weapon” and attempt another capital increase, despite having done so in February, they said. The money could be used to improve its balance sheet and expand capacity faster.
More clarity on the pace of production and deliveries of the Model Y is also high on the list of investors for the quarter.
See also:Tesla shares soar as quarterly sales flatten expectations
Tesla grouped production and sales of the Model Y, a compact SUV in the second quarter, with those of Model 3, and said it sold 80,050 and produced 75,946 of both, the vast majority of which was Model 3.
In addition to the focus on demand for Model Y, Wall Street is required to analyze any mention of sales targets for 2020.
Tesla said in April that it has “installed capacity” to deliver more than half a million vehicles by 2020 “despite announced production disruptions.”
Evercore ISI analysts on Monday raised their expectations for 2020 deliveries to 460,000 vehicles, from their previous expectation of 435,000 vehicles. The FactSet consensus calls for the sale of 435,000 units this year.
Another possible catalyst for the actions is just around the corner, and Tesla could provide more details about it during the call. Tesla has set its “battery day” for September 22 along with its annual shareholders meeting. The expectation is that the company will unveil a “million mile” battery and showcase advances that would comfortably place it ahead of the competition.
Innovations in battery technology “remain the key ingredients of Tesla’s success on the battery front and we believe the company is moving closer to announcing the million-mile battery,” said Dan Ives of Wedbush in a recent note. Such a battery could “last decades, withstand all kinds of weather / terrain and be another important milestone for the Tesla ecosystem.”
.
