Tesla (NASDAQ:TSLA) will deliver its earnings report on Wednesday after the market close and hold a vital conference call with potential headwinds lurking in the electrical vehicle sector and broad economy.
The electrical vehicle giant has already reported that it delivered 405K vehicles in Q4 (+31% Y/Y), but investors can be laser focused on what the pullouts are from the recent price cuts, buyer reactions to the EV tax credit timing, and the colour on automotive gross margin expectations.
There may be also the query of deliveries growth guidance for 2023. Tesla (TSLA) has issued a generic multi-year ~50% growth goal for volume that will must be revised in the brand new climate. “Musk needs to tear the band-aid off and lay a more realistic delivery goal for 2023 so the Street will believe on this number,” said Wedbush Securities analyst Dan Ives on the problem. “We view 35%-40% delivery growth for 2023 because the line within the sand based on whisper numbers with 1.8 million units the overall bogey for the 12 months,” he added.
Ahead of the report, Oppenheimer noted that expectations on Tesla (TSLA) are shifting quickly following the value drops on some key models. Analyst Colin Rusch thinks the electrical vehicle maker is making a proactive move to capture incentives, in addition to reset prices on EVs in key markets to assist protect the corporate’s market position and apply pressure on competition from a money flow. Nevertheless, the truth is that auto manufacturing margins are more likely to fall within the near term. Oppenheimer believes if TSLA is in a position to take care of automotive gross margin within the mid-20s through the primary half of the 12 months and move incrementally higher through the 12 months, shares are more likely to trade higher on earnings leverage potential.
On Searching for Alpha, Bill Cunningham did a dive into some necessary wildcards to observe with the Tesla (TSLA) earnings report that might impact the share price. Meanwhile, creator Victor Dergunov has an article pounding the table on the bull case.
What to observe: The conference call could provide a possibility for Musk to calm investors over the Twitter distraction. Also look ahead to an appearance by Tom Zhu, who was recently handed Tesla’s (TSLA) U.S. assembly plants and sales operations in North America and Europe as additional responsibilities. There may be some speculation that Zhu’s promotion makes him a candidate to be the eventual successor to Musk. Tesla’s (TSLA) earnings report has ceaselessly led to tandem moves throughout the electric vehicle sector. Some auto stocks that correlate very tightly with the EV mother ship on earnings day include Rivian Automotive (RIVN), Nikola (NKLA), Lucid Group (LCID), Lordstown Motors (RIDE), Sono Group (SEV), and Canoo (GOEV). Search for some share price jolts depending upon the read-through from Elon Musk and company.