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Will Tesla's (TSLA) Beat Streak Snap This Earnings Season?
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Tesla (TSLA - Free Report) is set to post fourth-quarter 2022 results on Jan 25, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $1.13 per share and $24.84 billion, respectively.
Tesla surpassed the Zacks Consensus Estimate for earnings in the last reported quarter on higher-than-expected revenues from Energy Generation/Storage and Services/Other segments. Over the trailing four quarters, Tesla beat the Zacks Consensus Estimate on all occasions, with the average being 26.4%. This is depicted in the graph below:
But will the company be able to maintain its beat streak this time around as well? While investors are keeping their fingers crossed, an earnings beat doesn’t look too likely for Tesla this time around.
Estimate Revisions
The Zacks Consensus Estimate for fourth-quarter earnings per share has moved south by a penny in the past seven days. The estimate for the bottom line, however, implies year-over-year growth of 32.9%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year rise of 40.2%.
Factors at Play
The company delivered 405,278 (388,131 Model 3 and Y, and 17,147 Model S and X) cars worldwide in the fourth quarter, up 31.5% from the year-ago quarter and 18.1% from the prior quarter. While the EV king hit record deliveries, it fell short of Wall Street expectations. Total deliveries also missed the Zacks Consensus Estimate of 407,855 units amid logistics problems and demand cool off in the face of rising interest rates and recessionary fears.Also, COVID resurgence in China caused the company to temporarily suspend and reduce production at its Shanghai factory.
In addition to the deliveries miss, Tesla offered steep discounts on its models in the United States, China and elsewhere to spur demand, which is likely to have limited automotive revenues to some extent. Further, high costs of raw materials and logistical constraints are likely to have put pressure on its margins. The Zacks Consensus Estimate for total automotive cost of revenues is $16.4 billion, significantly higher than $11.08 billion in the fourth quarter of 2021. Overall, weaker-than-expected deliveries, COVID disruptions in China, commodity cost inflation and economic concerns are expected to adversely impact Tesla’s upcoming results.
The consensus mark for Energy Generation and Storage revenues is pegged at $1,033 million, suggesting a decline from $1,117 million recorded in the previous reported quarter. The consensus estimate for revenues for Tesla’s Services and Other segment is pegged at $1,523 million, implying a fall from $1,645 million recorded in the third quarter of 2022.
What Does Our Model Say?
Our proven model doesn’t conclusively predict an earnings beat for Tesla this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: Tesla has an Earnings ESP of -3.95%. This is because the Most Accurate Estimate is pegged 4 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Tesla currently carries a Zacks Rank of 5 (Strong Sell).
While an earnings beat looks uncertain for Tesla, here are a couple of players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Lear (LEA - Free Report) will release fourth-quarter 2022 results on Feb 2. The company has an Earnings ESP of +4.29% and a Zacks Rank #3.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $2.53 per share and $5.26 billion, respectively. LEA surpassed earnings estimates in the trailing four quarters, with the average surprise being 18%.
Harley-Davidson (HOG - Free Report) is expected to report fourth-quarter 2022 results by mid-February. The company has an Earnings ESP of +300.00% and a Zacks Rank #1.
The Zacks Consensus Estimate for Harley-Davidson’s to-be-reported quarter’s earnings and revenues is pegged at 3 cents per share and $880.5 million, respectively. HOG surpassed earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 43.3%.
Image: Bigstock
Will Tesla's (TSLA) Beat Streak Snap This Earnings Season?
Tesla (TSLA - Free Report) is set to post fourth-quarter 2022 results on Jan 25, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $1.13 per share and $24.84 billion, respectively.
Tesla surpassed the Zacks Consensus Estimate for earnings in the last reported quarter on higher-than-expected revenues from Energy Generation/Storage and Services/Other segments. Over the trailing four quarters, Tesla beat the Zacks Consensus Estimate on all occasions, with the average being 26.4%. This is depicted in the graph below:
Tesla, Inc. Price and EPS Surprise
Tesla, Inc. price-eps-surprise | Tesla, Inc. Quote
But will the company be able to maintain its beat streak this time around as well? While investors are keeping their fingers crossed, an earnings beat doesn’t look too likely for Tesla this time around.
Estimate Revisions
The Zacks Consensus Estimate for fourth-quarter earnings per share has moved south by a penny in the past seven days. The estimate for the bottom line, however, implies year-over-year growth of 32.9%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year rise of 40.2%.
Factors at Play
The company delivered 405,278 (388,131 Model 3 and Y, and 17,147 Model S and X) cars worldwide in the fourth quarter, up 31.5% from the year-ago quarter and 18.1% from the prior quarter. While the EV king hit record deliveries, it fell short of Wall Street expectations. Total deliveries also missed the Zacks Consensus Estimate of 407,855 units amid logistics problems and demand cool off in the face of rising interest rates and recessionary fears.Also, COVID resurgence in China caused the company to temporarily suspend and reduce production at its Shanghai factory.
In addition to the deliveries miss, Tesla offered steep discounts on its models in the United States, China and elsewhere to spur demand, which is likely to have limited automotive revenues to some extent. Further, high costs of raw materials and logistical constraints are likely to have put pressure on its margins. The Zacks Consensus Estimate for total automotive cost of revenues is $16.4 billion, significantly higher than $11.08 billion in the fourth quarter of 2021. Overall, weaker-than-expected deliveries, COVID disruptions in China, commodity cost inflation and economic concerns are expected to adversely impact Tesla’s upcoming results.
The consensus mark for Energy Generation and Storage revenues is pegged at $1,033 million, suggesting a decline from $1,117 million recorded in the previous reported quarter. The consensus estimate for revenues for Tesla’s Services and Other segment is pegged at $1,523 million, implying a fall from $1,645 million recorded in the third quarter of 2022.
What Does Our Model Say?
Our proven model doesn’t conclusively predict an earnings beat for Tesla this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: Tesla has an Earnings ESP of -3.95%. This is because the Most Accurate Estimate is pegged 4 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Tesla currently carries a Zacks Rank of 5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
While an earnings beat looks uncertain for Tesla, here are a couple of players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Lear (LEA - Free Report) will release fourth-quarter 2022 results on Feb 2. The company has an Earnings ESP of +4.29% and a Zacks Rank #3.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $2.53 per share and $5.26 billion, respectively. LEA surpassed earnings estimates in the trailing four quarters, with the average surprise being 18%.
Harley-Davidson (HOG - Free Report) is expected to report fourth-quarter 2022 results by mid-February. The company has an Earnings ESP of +300.00% and a Zacks Rank #1.
The Zacks Consensus Estimate for Harley-Davidson’s to-be-reported quarter’s earnings and revenues is pegged at 3 cents per share and $880.5 million, respectively. HOG surpassed earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 43.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.