Tesla Inc. (NASDAQ: TSLA) has confirmed that it will release Q3 earnings on October 20, 2021, after market close.
What to look for
The Q3 earnings come as the company's sales continue to soar. Tesla usually announces deliveries before releasing earnings results, and deliveries were up substantially YoY. Investors will be keen on the order volume in Q3, which is expected to hit record levels. Early in the month, the company announced 73% YoY deliveries growth delivering 241,000 units. The boost in vehicle sales is likely to boost revenue growth and earnings growth. However, what is not clear is the level of earnings growth, considering their logistics and supply environment has been facing challenges.
Earnings: Stockearning’s Estimated EPS for Q3 2021 is $1.7 per share. Historical EPS Performance over the last 12 months shows that the company has topped estimates six times (50%0 and missed five times (41%). In the previous quarter, the company had EPS of $1.02, beating estimates of $0.52 per share.
Revenue: In May, Tesla removed radar and will realize the benefit of not having it in newer vehicles. The company expects total revenue of $14.35 billion and a gross profit of $3.46 billion. Automotive revenue is expected to be $12.247 billion, comprising $300 million in regulatory credits. In Q2, the company reported revenue of $11.96 billion.
Stock movement: Since the last earnings release, TSLA stock has been up 26.1%. The share price has been UP 25 times out of the past 44 quarters following the earnings release. So, the historical price reaction suggests a 56% chance of the share price going UP after the company releases earnings. According to the Stockearning algorithm, the predicted stock move on the first day is 6%, while the predicted move on the seventh day is 9%.
What analysts are saying
Barclays analyst Brian Johnson raised his price target on the stock from $230 to $300 and reiterated a "Sell" rating on the shares. Johnson said that despite skepticism regarding Tesla's high market capitalization of $800 billion, he is positive on the stock ahead of Q3 earnings release because the combination of string pricing and delivery beat boosts operating leverage. Even as chip shortages affect the automobile sector, the electric vehicle manufacturer has continued a healthy production pace and deliveries. As a result, Johnson feels that Tesla will meet demand while enhancing operating leverage with price increases in North America, boosting gross margins.
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