We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Tesla (TSLA) Eyes S&P 500 Inclusion After Q2 Earnings Beat
Read MoreHide Full Article
Tesla’s (TSLA - Free Report) shares rose around 6% in after-hours trading on Wednesday, following its incredible second-quarter results. The red hot EV maker smashed forecasts and posted the fourth consecutive quarterly profit, which qualifies it for inclusion in the S&P 500 list.
Tesla reported earnings per share of $2.18 in second-quarter 2020 against the Zacks Consensus Estimate of a loss of 49 cents. This outperformance stemmed from higher-than-anticipated revenues, which came in at $6,036 million, beating the consensus mark of $4,964 million. While the bottom line improved significantly from the prior-year quarter’s loss of $1.12 per share, the top line recorded a decline of 5%.
During the second quarter, Tesla reported delivery and production of 90,891 and 82,272 vehicles, respectively, reflecting a year-over-year decrease of 5% for both metrics. The downside mainly resulted from a decline in the level of production due to coronavirus-led shutdown of its main factory in Fremont during the quarter. Though delivery was down from the year-ago quarter, the figure beat analysts’ estimates and was higher than 88,496 deliveries recorded in the first quarter.
Model 3/Y registered production and deliveries of 75,946 vehicles and 80,277, pointing to a year-over-year increase of 5% and 3%, respectively. While the production rate and deliveries of Model 3/Y persistently improved, Model S/X production and deliveries totaled 6,326 and 10,614 vehicles, down 56% and 40% year over year, respectively.
Total automotive revenues slid 4% year over year to $5,179 million in the reported quarter. This included $428 million from the sale of regulatory credits for electric vehicles, which increased a whopping 286% year over year. Tesla expects regulatory credit revenues to double year over year in 2020. Tesla’s second-quarter 2020 automotive gross margin was 25.4%, improving 653 basis points (bps) from second-quarter 2019.
Energy generation and storage revenues came in at $370 million in second-quarter 2020 compared with $369 million in the year-ago period. Services and other revenues were down 19.5% year over year to $605 million.
Total operating expenses totaled $940 million during the quarter under review, down from $1,088 million in the corresponding period of 2019.
Financials
Tesla had cash and cash equivalents of $8,615 million as of Jun 30, 2020 compared with $8,080 million on Mar 31, 2020. Net cash provided by operating activities amounted to $964 million in second-quarter 2020 compared with $864 million in prior-year period. Capital expenditure increased to $546 million from the year-ago quarter’s $250 million. Importantly, the firm generated free cash flow (FCF) of $418 million during the quarter. The prior-quarter FCF was negative 895 million. However, the reported figure declined 32% from the year-ago level.
Outlook
Tesla maintains the target of exceeding 500,000 vehicle deliveries despite the recent production interruptions. However, amid coronavirus-related setbacks, Tesla refrained from providing any profit or cash flow forecast. Nonetheless, the company’s progress in the first half of 2020 has positioned it well for the second half of the year.
Model 3/Y installed capacity in Fremont is expected to extend from 400,000 to 500,000 units per year by the end of 2020. The construction of Model Y lines in Shanghai and Berlin Gigafactories are progressing well, and deliveries are expected to begin in 2021. Furthermore, deliveries for Tesla Semi are anticipated to begin in 2021. The company announced that it has chosen Austin to build the fifth Gigafactory.
On Track to Electrify S&P 500 Index
Yesterday was indeed a banner day for the company as Tesla finally managed to formally qualify for S&P 500 inclusion.Tesla’s entry in the elite S&P 500 Index would trigger automatic buying from passive investors including ETFs and indexes.
Although every earnings report is eagerly awaited by its investors, the stakes were particularly high this time around. By posting second-quarter earnings, Tesla reported its first full year of GAAP profits. Managing to remain in the black amid the challenging COVID-19 backdrop is certainly a jaw-dropping achievement for the company and Musk.
Shares of Tesla have risen 275% year to date, which is an astounding feat, considering the fact that coronavirus-induced lockdown hit markets very hard across the board earlier this year.Tesla fanboys, gamblers, and FOMO investors have propelled these shares to seemingly unsustainable highs.
Having said that, there’s no denying that a lot is going in favor of this firm including robust Model 3 demand, ramp up of Model Y production, significant Shanghai Gigafactory progress, ambitious Berlin Gigafactory, amazing line-up of upcoming products and aggressive expansion efforts. To add to that, the company’s smashing results have somewhat silenced the Tesla skeptics, removing concerns that the firm is structurally unprofitable. With many factors working in favor of the stock, one can see the stock making way to the S&P 500 list this year.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Shutterstock
Tesla (TSLA) Eyes S&P 500 Inclusion After Q2 Earnings Beat
Tesla’s (TSLA - Free Report) shares rose around 6% in after-hours trading on Wednesday, following its incredible second-quarter results. The red hot EV maker smashed forecasts and posted the fourth consecutive quarterly profit, which qualifies it for inclusion in the S&P 500 list.
Tesla reported earnings per share of $2.18 in second-quarter 2020 against the Zacks Consensus Estimate of a loss of 49 cents. This outperformance stemmed from higher-than-anticipated revenues, which came in at $6,036 million, beating the consensus mark of $4,964 million. While the bottom line improved significantly from the prior-year quarter’s loss of $1.12 per share, the top line recorded a decline of 5%.
Tesla, Inc. Price, Consensus and EPS Surprise
Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote
Key Takeaways
During the second quarter, Tesla reported delivery and production of 90,891 and 82,272 vehicles, respectively, reflecting a year-over-year decrease of 5% for both metrics. The downside mainly resulted from a decline in the level of production due to coronavirus-led shutdown of its main factory in Fremont during the quarter. Though delivery was down from the year-ago quarter, the figure beat analysts’ estimates and was higher than 88,496 deliveries recorded in the first quarter.
Model 3/Y registered production and deliveries of 75,946 vehicles and 80,277, pointing to a year-over-year increase of 5% and 3%, respectively. While the production rate and deliveries of Model 3/Y persistently improved, Model S/X production and deliveries totaled 6,326 and 10,614 vehicles, down 56% and 40% year over year, respectively.
Total automotive revenues slid 4% year over year to $5,179 million in the reported quarter. This included $428 million from the sale of regulatory credits for electric vehicles, which increased a whopping 286% year over year. Tesla expects regulatory credit revenues to double year over year in 2020. Tesla’s second-quarter 2020 automotive gross margin was 25.4%, improving 653 basis points (bps) from second-quarter 2019.
Energy generation and storage revenues came in at $370 million in second-quarter 2020 compared with $369 million in the year-ago period. Services and other revenues were down 19.5% year over year to $605 million.
Total operating expenses totaled $940 million during the quarter under review, down from $1,088 million in the corresponding period of 2019.
Financials
Tesla had cash and cash equivalents of $8,615 million as of Jun 30, 2020 compared with $8,080 million on Mar 31, 2020. Net cash provided by operating activities amounted to $964 million in second-quarter 2020 compared with $864 million in prior-year period. Capital expenditure increased to $546 million from the year-ago quarter’s $250 million. Importantly, the firm generated free cash flow (FCF) of $418 million during the quarter. The prior-quarter FCF was negative 895 million. However, the reported figure declined 32% from the year-ago level.
Outlook
Tesla maintains the target of exceeding 500,000 vehicle deliveries despite the recent production interruptions. However, amid coronavirus-related setbacks, Tesla refrained from providing any profit or cash flow forecast. Nonetheless, the company’s progress in the first half of 2020 has positioned it well for the second half of the year.
Model 3/Y installed capacity in Fremont is expected to extend from 400,000 to 500,000 units per year by the end of 2020. The construction of Model Y lines in Shanghai and Berlin Gigafactories are progressing well, and deliveries are expected to begin in 2021. Furthermore, deliveries for Tesla Semi are anticipated to begin in 2021. The company announced that it has chosen Austin to build the fifth Gigafactory.
On Track to Electrify S&P 500 Index
Yesterday was indeed a banner day for the company as Tesla finally managed to formally qualify for S&P 500 inclusion.Tesla’s entry in the elite S&P 500 Index would trigger automatic buying from passive investors including ETFs and indexes.
Although every earnings report is eagerly awaited by its investors, the stakes were particularly high this time around. By posting second-quarter earnings, Tesla reported its first full year of GAAP profits. Managing to remain in the black amid the challenging COVID-19 backdrop is certainly a jaw-dropping achievement for the company and Musk.
Shares of Tesla have risen 275% year to date, which is an astounding feat, considering the fact that coronavirus-induced lockdown hit markets very hard across the board earlier this year.Tesla fanboys, gamblers, and FOMO investors have propelled these shares to seemingly unsustainable highs.
Having said that, there’s no denying that a lot is going in favor of this firm including robust Model 3 demand, ramp up of Model Y production, significant Shanghai Gigafactory progress, ambitious Berlin Gigafactory, amazing line-up of upcoming products and aggressive expansion efforts. To add to that, the company’s smashing results have somewhat silenced the Tesla skeptics, removing concerns that the firm is structurally unprofitable. With many factors working in favor of the stock, one can see the stock making way to the S&P 500 list this year.
Zacks Rank & Key Picks
Tesla currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space include Asbury Automotive Group Inc. (ABG - Free Report) , Lithia Motors (LAD - Free Report) and Sonic Automotive Inc. (SAH - Free Report) , each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>