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Tesla earnings look ahead

Tesla’s earnings report on 22 February comes after the shares have risen sharply in the past quarter, strongly outperforming the Dow and S&P 500.

Source: Bloomberg

There will be much attention lavished on the Model 3, which Elon Musk says should be produced from July and sold by the end of the year. Overall production is expected to hit 500,000 vehicles in 2018, with the Model 3 making up an increasingly large proportion of this total. The most recent quarter saw the company actually turn a profit for a change, while sales also beat forecasts.

Current forecasts are for a loss of 51 cents per share, an improvement since the 87 cents loss seen in the final quarter of 2015. Sales of $2.18 billion are expected, from $1.75 billion a year earlier.

Investors should be on the lookout for any suggestions Tesla will look to raise funds on capital markets. The third quarter conference saw Elon Musk dodge this funding question, but it could come up once more. In addition, Tesla will need to avoid giving any impression the Model 3 will be delayed. Having left the S&P 500 trailing in the dust over the past year, the company needs to paint a positive picture for the year ahead.

Tesla stock peaked at $287.28 on 14 February, but then failed to close above the $286.55 high from July 2015. The price has moved back above the $269.58 high from September 2015 and April 2016, but a move below here could see a move back to the rising trend off the December lows, which would suggest a move back to $260. Below this, the next target would be $240.80. 

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