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Electric carmaker Tesla Motors (TSLA - Free Report) is scheduled to report results for the third quarter of 2024 on Oct. 23, after market close.
Tesla has lost 13% over the past three months compared with the industry’s decline of 14.8%. Notably, Tesla’s Robotaxi event failed to impress investors, pushing Tesla's shares down about 9% since Oct. 10. The weak trend might reverse 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: Time for Uber-Lyft ETFs After Tesla's Unimpressive Robotaxi Event?).
Image Source: Zacks Investment Research
ETFs having a substantial allocation to this luxury carmaker like Direxion Daily TSLA Bull 2X Shares (TSLL - Free Report) , ARK Innovation ETF (ARKK - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) and ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) are in focus ahead of the company’s third-quarter earnings.
Earnings Whispers
Tesla has an Earnings ESP of -1.28% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) 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 penny over the past seven 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 third-quarter earnings indicates a substantial year-over-year decline of 12.1% and revenue growth of 9.5%. The earnings track record of the company is not good as it delivered a four-quarter average negative earnings surprise of 7.99%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Earlier this month, Tesla returned to delivery growth in the third quarter after two consecutive quarters of decline and reported the third-largest quarterly number in the company's history (read: Tesla Returns to Delivery Growth but Shares Slip: ETFs in Focus).
This leading electric carmaker delivered 462,890 (439,975 Model 3/Y and 22,915 other models) cars worldwide in the third quarter, up 6.4% year over. This marks the first quarter of year-over-year growth in 2024 and the third-largest quarterly number in the company's history. However, delivery numbers fell short of the estimated 463,310, according to FactSet StreetAccount data. Tesla produced 469,796 (443,668 Model 3/Y and 26,128 other models) vehicles during the quarter.
The return to growth shows that some of the incentives that Tesla had rolled out to boost demand are now paying off.
What to Watch
Investors are keenly waiting for specifics on the company's plans for an affordable EV below $30,000 and its long-term Cybercab vision after the recent Robotaxi event, which left investors disappointed due to the lack of concrete details regarding its ridesharing platform.
On Oct. 10, Tesla CEO Elon Musk unveiled long-anticipated prototypes of the Cybercab, the company’s new robotaxi. The upcoming self-driving Cybercab will be available for under $30,000, with production expected to begin in 2026. Tesla also revealed a Robovan concept, a larger autonomous vehicle capable of transporting up to 20 people at a time. Both the Cybercab and Robovan signal Tesla's efforts to expand into the autonomous transportation market, with the Cybercab positioned as a more affordable option for consumers looking to use or rent out self-driving vehicles through the Tesla network.
Tesla’s strategy is to rely on its camera-based Full Self-Driving (FSD) system, which is considerably different from competitors like Waymo that use expensive lidar and radar technology. The carmaker is on track to begin production of new, affordable EV models in early 2025. The new and more affordable models will be built on Tesla's next-generation platform and will be produced on the same production sites as Tesla's current offerings.
With AUM of $2.1 billion, Direxion Daily TSLA Bull 2X Shares is by far the largest U.S.-listed single-stock ETF on the market. It offers 2 times (200%) the daily percentage change of the common stock of Tesla, charging 86 bps in annual fees.
ARK Innovation ETF is an actively managed fund that invests 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 34 securities in its basket, with Tesla occupying the top spot at 13%. ARK Innovation ETF has gathered $5.6 billion in its asset base and charges 75 bps in fees per year from investors.
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 50 securities in its basket, Tesla takes the second spot with 12.5% of the assets. Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $19.8 billion and charges 9 bps in annual fees. It has a Zacks ETF Rank #2 with a Medium risk outlook.
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report)
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. Simplify Volt Robocar Disruption and Tech ETF charges investors 0.95% in annual fees. It has accumulated $5.2 million in its asset base (read: 5 Tech ETFs at the Forefront of the Fed-Induced Rally).
ARK Autonomous Technology & Robotics ETF is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of products or services and technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials, and transportation. This approach results in a basket of 37 stocks, with Tesla occupying the top spot with an 11.9% share. ARK Autonomous Technology & Robotics ETF has accumulated $785.3 million in its asset base and charges 75 bps in fees per year.
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Should You Buy Tesla ETFs Ahead of Q3 Earnings?
Electric carmaker Tesla Motors (TSLA - Free Report) is scheduled to report results for the third quarter of 2024 on Oct. 23, after market close.
Tesla has lost 13% over the past three months compared with the industry’s decline of 14.8%. Notably, Tesla’s Robotaxi event failed to impress investors, pushing Tesla's shares down about 9% since Oct. 10. The weak trend might reverse 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: Time for Uber-Lyft ETFs After Tesla's Unimpressive Robotaxi Event?).
Image Source: Zacks Investment Research
ETFs having a substantial allocation to this luxury carmaker like Direxion Daily TSLA Bull 2X Shares (TSLL - Free Report) , ARK Innovation ETF (ARKK - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) and ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) are in focus ahead of the company’s third-quarter earnings.
Earnings Whispers
Tesla has an Earnings ESP of -1.28% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) 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 penny over the past seven 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 third-quarter earnings indicates a substantial year-over-year decline of 12.1% and revenue growth of 9.5%. The earnings track record of the company is not good as it delivered a four-quarter average negative earnings surprise of 7.99%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Tesla, Inc. Price, Consensus and EPS Surprise
Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote
Strong Q3 Deliveries
Earlier this month, Tesla returned to delivery growth in the third quarter after two consecutive quarters of decline and reported the third-largest quarterly number in the company's history (read: Tesla Returns to Delivery Growth but Shares Slip: ETFs in Focus).
This leading electric carmaker delivered 462,890 (439,975 Model 3/Y and 22,915 other models) cars worldwide in the third quarter, up 6.4% year over. This marks the first quarter of year-over-year growth in 2024 and the third-largest quarterly number in the company's history. However, delivery numbers fell short of the estimated 463,310, according to FactSet StreetAccount data. Tesla produced 469,796 (443,668 Model 3/Y and 26,128 other models) vehicles during the quarter.
The return to growth shows that some of the incentives that Tesla had rolled out to boost demand are now paying off.
What to Watch
Investors are keenly waiting for specifics on the company's plans for an affordable EV below $30,000 and its long-term Cybercab vision after the recent Robotaxi event, which left investors disappointed due to the lack of concrete details regarding its ridesharing platform.
On Oct. 10, Tesla CEO Elon Musk unveiled long-anticipated prototypes of the Cybercab, the company’s new robotaxi. The upcoming self-driving Cybercab will be available for under $30,000, with production expected to begin in 2026. Tesla also revealed a Robovan concept, a larger autonomous vehicle capable of transporting up to 20 people at a time. Both the Cybercab and Robovan signal Tesla's efforts to expand into the autonomous transportation market, with the Cybercab positioned as a more affordable option for consumers looking to use or rent out self-driving vehicles through the Tesla network.
Tesla’s strategy is to rely on its camera-based Full Self-Driving (FSD) system, which is considerably different from competitors like Waymo that use expensive lidar and radar technology. The carmaker is on track to begin production of new, affordable EV models in early 2025. The new and more affordable models will be built on Tesla's next-generation platform and will be produced on the same production sites as Tesla's current offerings.
ETFs in Focus
Direxion Daily TSLA Bull 2X Shares (TSLL - Free Report)
With AUM of $2.1 billion, Direxion Daily TSLA Bull 2X Shares is by far the largest U.S.-listed single-stock ETF on the market. It offers 2 times (200%) the daily percentage change of the common stock of Tesla, charging 86 bps in annual fees.
ARK Innovation ETF (ARKK - Free Report)
ARK Innovation ETF is an actively managed fund that invests 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 34 securities in its basket, with Tesla occupying the top spot at 13%. ARK Innovation ETF has gathered $5.6 billion in its asset base and charges 75 bps in fees per year from investors.
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 50 securities in its basket, Tesla takes the second spot with 12.5% of the assets. Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $19.8 billion and charges 9 bps in annual fees. It has a Zacks ETF Rank #2 with a Medium risk outlook.
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report)
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. Simplify Volt Robocar Disruption and Tech ETF charges investors 0.95% in annual fees. It has accumulated $5.2 million in its asset base (read: 5 Tech ETFs at the Forefront of the Fed-Induced Rally).
ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report)
ARK Autonomous Technology & Robotics ETF is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of products or services and technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials, and transportation. This approach results in a basket of 37 stocks, with Tesla occupying the top spot with an 11.9% share. ARK Autonomous Technology & Robotics ETF has accumulated $785.3 million in its asset base and charges 75 bps in fees per year.