Tesla earnings preview: EV sector buckles up for pricing, margin and new model developments
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Tesla (NASDAQ:TSLA) will report earnings for the second quarter on July 19. Analysts are expecting revenue to grow 47% year-over-year to $24.5B and EPS to come in at $0.81. Gross margin is seen coming in at 18.7% vs. 19.3% in Q1. EBITDA is seen slipping to $4.14B from $4.27B in the prior-year quarterThe company already topped expectations with a Q2 deliveries tally of 466,140. Free cash flow of $2.2B is expected to have been generated during the quarter.
The electric vehicle maker has already disclosed that it delivered 19,225 Model S and X vehicles during the quarter vs. 16.0K consensus and 446,915 of the lower priced Model 3 sedans and Model Y crossovers during the quarter vs. 430K consensus. Tesla reported production in the quarter of 479.7K vs. 457K consensus. For the full year, Tesla (TSLA) is forecast to deliver 1.85M vehicles.
The biggest focus for investors could be the impact of the price cuts by Tesla during the quarter. Other items of interest will be the energy storage update, and the outlook for the Austin, Shanghai, and Berlin gigafactories. Tesla's current guidance is for roughly 1.8M vehicles deliveries in 2023 vs. the 1.37M vehicles delivered in 2022. On the earnings conference call, Elon Musk could stir things by by updating on the sub-$30K Model 2, which is expected to be built out of Mexico sometime in 2025. Tesla (TSLA) may also set a date for its Cybertruck event, add context to the impact of automakers across the industry adopting the NACS charging standard, and give morw color about the planned Model 3 refresh. Tesla (TSLA) has beat estimates on the revenue line in 9 of the last 12 quarters and topped EPS estimates in five of the last six quarters. Options trading on Tesla (TSLA) implies a share price swing of 6.8% following the report. Tesla (TSLA) shed 9.8% after its last earnings report.
On Seeking Alpha, Investing Group Leader Ahan Vashi noted Tesla's (TSLA) energy business was a bright spot in its Q1 earnings report and is severely underappreciated by investors. Vashi said Tesla's (TSLA) energy storage business is seeing immense demand, and the segment could significantly boost overall financial performance as Tesla's Lathrop facility scales Megapack BESS production throughout 2023.
Tesla (TSLA) earnings days can create a ripple across the broad electric vehicle sector. Investors will be keeping an eye on Rivian Automotive (RIVN), Lucid Group (LCID), Fisker (FSR), Faraday Future (FFIE), Nio (NIO), XPeng (XPEV), Li Auto (LI), and Polestar Automotive (PSNY) to name a few. Even Detroit auto stocks General Motors (GM) and Ford (F) have been jolted in the past on TSLA earnings developments.
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