Tesla Earnings: After 3 Consecutive Misses, What Can We Expect?

As Tesla is poised to release its second-quarter earnings report on July 23, markets are intently focused on the electric vehicle maker’s financial health and future prospects.

With 3 consecutive misses on EPS and earnings under it's belt, Tesla holders will be looking for the firm to start setting a run in the opposite direction. With Tesla stock having rebounded strongly over the past month, up almost 37%, there is clearly some momentum building. Here's a quick take of the previous reports as we look out to the next:

Analysts anticipates a decline in companywide operating profit margins year-on-year for the second quarter. This would mark another period of contraction for the innovative automaker. Despite this expectation, there is optimism pinned on new initiatives, notably the development of a more affordably priced vehicle slated for release by the end of 2025, which is regarded as a key catalyst that could bolster Tesla’s delivery growth and market penetration.

A significant facet of Tesla's allure as an innovator in the automotive space is its Full Self-Driving (FSD) software. This technology is not only a major differentiator from competitors but also a potential source of substantial revenue. Updates on FSD adoption rates will be a critical data point that analysts and investors are waiting for.

Looking beyond the automotive side, Tesla's energy generation and storage segment is projected to see robust growth, specifically an increase of at least 75% in 2024 relative to 2023, with the Megapack product driving the demand. Such growth could diversify revenue streams and reduce reliance on vehicle sales.

Analysts have assigned a consensus estimate of $200 per share to Tesla, indicating a belief that the stock is reasonably valued. The narrow economic moat rating reflects unique advantages Tesla holds in intangible assets, cost advantage, and its strong brand, which allows it to command premium pricing in the luxury auto market.

Tesla's solid financial foundation is underscored by its cash, cash equivalents, and investments which, as of March 31, 2024, surpassed its total debt. This is an important consideration for investors, denoting financial resilience and the ability to invest in growth.

As Tesla's shares continue to be the subject of intense scrutiny, it is essential for investors to consider the numerous factors that will play a role in the company's future success. The forthcoming earnings report will provide fresh insights into Tesla's progress, its challenges, and the efficacy of its long-term strategy. While Tesla maintains many of the qualities of a premium brand and innovator, the road ahead is paved with uncertainties that will require prudent navigation.