- Earnings season will kick into high gear this afternoon as Tesla (NASDAQ:TSLA) reports Q1 results. The EV automaker has already seen record sales in the first quarter, delivering nearly 185,000 vehicles, but it will need to convince investors that it can hold on to its lead in an increasingly crowded playing field. The stock is flat YTD, after jumping over 700% in 2020, and shares have a long history of volatile moves on earnings day.
By the numbers: Wall Street expects impressive growth for non-GAAP earnings per share, which could soar 208% Y/Y to $0.77, and revenue forecasts are optimistic, with consensus estimates standing at $10.3B, or a Y/Y increase of 72%. Gross margins are also on watch. Model refreshes and stalling production of the higher-priced Model S and X during the quarter may see margins slip further, after falling to 24.1% in Q4, from 27.7% in the prior period.
Headwinds? Recent negative headlines from China (malfunction protests and a military complex ban), as well as a crash in Texas (that seemed erroneously connected to Autopilot), are likely to come up in the conference call. There's also risk that as traditional automakers drive on to the EV scene, they'll need to buy fewer regulatory credits from Tesla to keep in line with emissions rules. While the credits are a small source of revenue, they can help bolster profits since there are no costs associated with them.
Outlook: While Tesla has not yet provided a specific vehicle delivery estimate for 2021, it could be a lofty number. Tesla's vehicle deliveries already grew 36% to nearly half a million in 2020, and Technoking Elon Musk has commented that the company could see an annual growth of 50% or more this year. Investors are also hoping for comments surrounding Tesla's new plants in Germany and Austin, Texas, and other growth forecasts, as Tesla continues to roll out its international expansion. | | Top News  Shutterstock Earnings season will kick into high gear this afternoon as Tesla (NASDAQ:TSLA) reports Q1 results. The EV automaker has already seen record sales in the first quarter, delivering nearly 185,000 vehicles, but it will need to convince investors that it can hold on to its lead in an increasingly crowded playing field. The stock is flat YTD, after jumping over 700% in 2020, and shares have a long history of volatile moves on earnings day.
By the numbers: Wall Street expects impressive growth for non-GAAP earnings per share, which could soar 208% Y/Y to $0.77, and revenue forecasts are optimistic, with consensus estimates standing at $10.3B, or a Y/Y increase of 72%. Gross margins are also on watch. Model refreshes and stalling production of the higher-priced Model S and X during the quarter may see margins slip further, after falling to 24.1% in Q4, from 27.7% in the prior period.
Headwinds? Recent negative headlines from China (malfunction protests and a military complex ban), as well as a crash in Texas (that seemed erroneously connected to Autopilot), are likely to come up in the conference call. There's also risk that as traditional automakers drive on to the EV scene, they'll need to buy fewer regulatory credits from Tesla to keep in line with emissions rules. While the credits are a small source of revenue, they can help bolster profits since there are no costs associated with them.
Outlook: While Tesla has not yet provided a specific vehicle delivery estimate for 2021, it could be a lofty number. Tesla's vehicle deliveries already grew 36% to nearly half a million in 2020, and Technoking Elon Musk has commented that the company could see an annual growth of 50% or more this year. Investors are also hoping for comments surrounding Tesla's new plants in Germany and Austin, Texas, and other growth forecasts, as Tesla continues to roll out its international expansion.    | |
| Stocks U.S. stock futures were mixed, but little changed, overnight, with the Dow up 0.1%, and the S&P 500 and Nasdaq off 0.1% and 0.3%, respectively. The moves come ahead of the busiest week of earnings season and follow the first weekly loss in five on Wall Street. Analysts say high valuations have kept traders' enthusiasm in check, but indexes are within 1% of their all-time highs.
About a third of the S&P 500 are set to update investors over the next five sessions. Tesla (TSLA) will kick off the action this afternoon, while Big Tech will make headlines the rest of the week, with results from Amazon (AMZN), Alphabet (GOOG, GOOGL), Apple (AAPL) and Microsoft (MSFT). Investors will also be gauging economic reopening plays, such as Boeing (BA), Caterpillar (CAT) and Ford (F), which are expected to detail price pressures from rising materials and transportation costs.
Statistics: Corporations have been putting up some nice numbers thus far. About a quarter of S&P 500 companies have already published Q1 results, with 84% reporting a positive per share earnings surprise and 77% topping revenue estimates. If 84% is the final percentage, it will tie the mark for the highest percentage of S&P 500 companies reporting an EPS beat since FactSet began tracking the data in 2008.
That's not all: President Biden is due to release his "American Families Plan" this week that would double the capital gains tax for the ultra-wealthy. The Fed also meets Tuesday and Wednesday, and is expected to defend its policy of letting inflation run hot. At a press conference following the announcement, Chair Jerome Powell is likely to assure markets that the pick-up in prices is only temporary, before the March personal consumption expenditures index, one measure of inflation, comes out Friday. |
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