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Can Tesla ETFs Maintain Rally Going Into Q2 Earnings?
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Electric carmaker Tesla Motors (TSLA - Free Report) is scheduled to report results for the second quarter of 2024 on Jul 23, after market close.
Tesla has surged 65.3% over the past three months, outperforming the industry’s growth of 47.3%. In particular, Tesla has experienced a dramatic surge this month, with the share price surging 20.9%. This has helped the EV maker to erase most of the losses suffered in the first half of the year. The strong trend is likely to continue if Tesla comes up with an earnings beat. The electric carmaker saw favorable earnings estimate revision for the to-be-reported quarter, which is generally a precursor to an earnings beat (read: Can Tesla ETFs Maintain New-Found Winning Momentum?).
Image Source: Zacks Investment Research
ETFs having a substantial allocation to this luxury carmaker like Direxion Daily TSLA Bull 1.5X Shares (TSLL) , MeetKevin Pricing Power ETF (PP) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Simplify Volt Robocar Disruption and Tech ETF (VCAR) and ARK Innovation ETF (ARKK - Free Report) are in focus ahead of its second-quarter earnings.
Earnings Whispers
Tesla has an Earnings ESP of -4.13% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The electric carmaker saw a positive earnings estimate revision of a couple of cents over the past 30 days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The Zacks Consensus Estimate for the second quarter indicates a substantial year-over-year earnings decline of 31.9% and revenue growth of 0.8%. The earnings track record of the company is not good as it delivered a four-quarter average negative earnings surprise of 1.55%.
Earlier this month, Tesla reported stronger-than-expected vehicle delivery numbers, which point to improved demand that may help ease concerns around excess inventory for its flagship Model 3/Y.
This leading electric carmaker delivered 443,956 (422,405 Model 3/Y and 21,551 other models) cars worldwide in the second quarter. Though deliveries declined 4.8% from the year-ago quarter, the number was better than the 436,000 that analysts had expected. The annual drop in sales reflects the increased competition in the electric vehicles market. The sales of electric vehicles were at a slower pace, which resulted in investors demanding each car sold be more profitable than before. Tesla produced 410,831 (386,576 Model 3/Y, and 24,255 other models) vehicles during the quarter (read: Tap Tesla's Better-Than-Expected Q2 Deliveries With These ETFs).
What’s Hot?
Several analysts increased their target price on Tesla following the robust delivery numbers, which indicate that the company’s turnaround might have started.
With AUM of $2 billion, Direxion Daily TSLA Bull 1.5X Shares is by far the largest U.S.-listed single-stock ETF on the market. It offers 1.5 times (150%) the daily percentage change of the common stock of Tesla, charging 86 bps in annual fees. TSLL trades in an average daily volume of 40 million shares.
MeetKevin Pricing Power ETF is an actively managed ETF that seeks to achieve its investment objective by investing primarily in U.S.-listed equity securities of Innovative Companies that, in Kevin’s view, have more “pricing power” than their peers. The fund holds a small basket of 22 stocks, with Tesla occupying the second position at 15.5%.
MeetKevin Pricing Power ETF has accumulated $47.4 million in its asset base. It charges 77 bps in annual fees and trades in a lower volume of 20,000 shares a day on average.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. Holding 52 securities in its basket, Tesla takes the second spot with 18.2% of the assets (read: Consumer Discretionary ETF (XLY - Free Report) Hits New 52-Week High).
Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $20.4 billion and an average daily volume of around 3 million shares. It charges 9 in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
Simplify Volt Robocar Disruption and Tech ETF (VCAR)
Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology. It employs a call option overlay to seek boosts in performance during extreme moves up in Tesla while holding a tech index for diversification and put options as a hedge (see: all the Alternative Energy ETFs here).
Simplify Volt Robocar Disruption and Tech ETF charges investors 0.95% in annual fees. It has accumulated $5.8 million in its asset base while trading in an average daily volume of 2,000 shares.
ARK Innovation ETF is an actively managed fund investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research related to the areas of DNA Technologies and Genomic Revolution, Automation, Robotics, Energy Storage, Artificial Intelligence, Next Generation Internet and Fintech Innovation. The fund holds 33 securities in its basket, with Tesla occupying the top spot at 14.5%.
ARK Innovation ETF has gathered $6.7 billion in its asset base and charges 75 bps in fees per year from investors. It trades in an average daily volume of 8 million shares.
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Can Tesla ETFs Maintain Rally Going Into Q2 Earnings?
Electric carmaker Tesla Motors (TSLA - Free Report) is scheduled to report results for the second quarter of 2024 on Jul 23, after market close.
Tesla has surged 65.3% over the past three months, outperforming the industry’s growth of 47.3%. In particular, Tesla has experienced a dramatic surge this month, with the share price surging 20.9%. This has helped the EV maker to erase most of the losses suffered in the first half of the year. The strong trend is likely to continue if Tesla comes up with an earnings beat. The electric carmaker saw favorable earnings estimate revision for the to-be-reported quarter, which is generally a precursor to an earnings beat (read: Can Tesla ETFs Maintain New-Found Winning Momentum?).
Image Source: Zacks Investment Research
ETFs having a substantial allocation to this luxury carmaker like Direxion Daily TSLA Bull 1.5X Shares (TSLL) , MeetKevin Pricing Power ETF (PP) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Simplify Volt Robocar Disruption and Tech ETF (VCAR) and ARK Innovation ETF (ARKK - Free Report) are in focus ahead of its second-quarter earnings.
Earnings Whispers
Tesla has an Earnings ESP of -4.13% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The electric carmaker saw a positive earnings estimate revision of a couple of cents over the past 30 days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The Zacks Consensus Estimate for the second quarter indicates a substantial year-over-year earnings decline of 31.9% and revenue growth of 0.8%. The earnings track record of the company is not good as it delivered a four-quarter average negative earnings surprise of 1.55%.
Tesla, Inc. Price, Consensus and EPS Surprise
Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote
Strong Q2 Deliveries
Earlier this month, Tesla reported stronger-than-expected vehicle delivery numbers, which point to improved demand that may help ease concerns around excess inventory for its flagship Model 3/Y.
This leading electric carmaker delivered 443,956 (422,405 Model 3/Y and 21,551 other models) cars worldwide in the second quarter. Though deliveries declined 4.8% from the year-ago quarter, the number was better than the 436,000 that analysts had expected. The annual drop in sales reflects the increased competition in the electric vehicles market. The sales of electric vehicles were at a slower pace, which resulted in investors demanding each car sold be more profitable than before. Tesla produced 410,831 (386,576 Model 3/Y, and 24,255 other models) vehicles during the quarter (read: Tap Tesla's Better-Than-Expected Q2 Deliveries With These ETFs).
What’s Hot?
Several analysts increased their target price on Tesla following the robust delivery numbers, which indicate that the company’s turnaround might have started.
Direxion Daily TSLA Bull 1.5X Shares (TSLL)
With AUM of $2 billion, Direxion Daily TSLA Bull 1.5X Shares is by far the largest U.S.-listed single-stock ETF on the market. It offers 1.5 times (150%) the daily percentage change of the common stock of Tesla, charging 86 bps in annual fees. TSLL trades in an average daily volume of 40 million shares.
MeetKevin Pricing Power ETF (PP)
MeetKevin Pricing Power ETF is an actively managed ETF that seeks to achieve its investment objective by investing primarily in U.S.-listed equity securities of Innovative Companies that, in Kevin’s view, have more “pricing power” than their peers. The fund holds a small basket of 22 stocks, with Tesla occupying the second position at 15.5%.
MeetKevin Pricing Power ETF has accumulated $47.4 million in its asset base. It charges 77 bps in annual fees and trades in a lower volume of 20,000 shares a day on average.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. Holding 52 securities in its basket, Tesla takes the second spot with 18.2% of the assets (read: Consumer Discretionary ETF (XLY - Free Report) Hits New 52-Week High).
Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $20.4 billion and an average daily volume of around 3 million shares. It charges 9 in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
Simplify Volt Robocar Disruption and Tech ETF (VCAR)
Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology. It employs a call option overlay to seek boosts in performance during extreme moves up in Tesla while holding a tech index for diversification and put options as a hedge (see: all the Alternative Energy ETFs here).
Simplify Volt Robocar Disruption and Tech ETF charges investors 0.95% in annual fees. It has accumulated $5.8 million in its asset base while trading in an average daily volume of 2,000 shares.
ARK Innovation ETF (ARKK - Free Report)
ARK Innovation ETF is an actively managed fund investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research related to the areas of DNA Technologies and Genomic Revolution, Automation, Robotics, Energy Storage, Artificial Intelligence, Next Generation Internet and Fintech Innovation. The fund holds 33 securities in its basket, with Tesla occupying the top spot at 14.5%.
ARK Innovation ETF has gathered $6.7 billion in its asset base and charges 75 bps in fees per year from investors. It trades in an average daily volume of 8 million shares.