Stock Market News –Tesla’s quarterly report to halt slide in stock price?
July 31, 2018 2:26 pm
Tesla’s earnings report for Q2 2018 will be going public after the US market close on Wednesday. The consensus recommendation for the company is “hold”, which negatively compares to the average consensus recommendation of the Auto & Truck Manufactures peer group.
The electric-vehicle maker’s earnings per share are anticipated to stand at -$2.89 during the quarter ending in June, according to Thomson Reuters consensus estimates; in other words, the firm is expected to record a loss. Current projections reflect a deterioration from $2.71 in losses per share from four weeks ago, while if forecasts are met, this would represent an increase in losses of around 117.5% compared to the same quarter last year when the corporation lost $1.33 per share. Additionally, EPS expectations range from -$3.44 to -$2.19. In the meantime, Tesla managed to deliver better results than Wall Street analysts’ profit estimates in three of the four previously reported quarters, while doing worse than forecasted once.
The firm’s quarterly revenues, anticipated at $3.96 billion from $2.79bn in Q2 2017, will also be scrutinized by investors; despite the automotive business making the bulk of revenues, sales stemming from the energy generation and storage segment will also be monitored. All in all and combined with the abovementioned, the consensus view is that the company will post much bigger losses on considerably larger sales. Meanwhile, similar to Q1, cash considerations will come to the fore. Does the corporation have enough cash for the year, or will it need additional financing? Should the latter be the case and given that CEO Elon Musk has indicated in the past that the firm will not require equity or debt financing this year, it will likely be perceived as a negative sign by market participants, weighing on the stock.
Other areas of interest will pertain to gross margins and net reservations (new orders minus cancelled reservations) for Model 3, this being the company’s vehicle that’s directed to the mass market and which has been facing production lags. In this respect, an update on production will also probably prove of importance.
Overall encouraging results by the carmaker are likely to spur long positions on its stock, with initial resistance to gains possibly coming around the $300 mark which may hold psychological significance. Not far above lie the current levels of the 100- and 50-day moving average lines – at $307.39 and $316.66 respectively – that may act as barriers to stronger bullish movement. Conversely, a weaker than anticipated report is expected to see the shares come under selling pressure. Support to losses could take place around the four-month low of $273.42 from May 22, with a downside violation increasingly brining into scope the 17-month low of $244.59 hit in early April.
Technically, the stock appears negative in the short-term – the RSI is in bearish territory and continues declining – and the medium-term – trading is taking place below the 50- and 100-day moving average lines. The shares lost 5.4% of their value this week (on Monday and Tuesday), falling in “sympathy” to other Nasdaq stocks that experienced losses on poor earnings, but also being dragged on the back of several Wall Street analysts striking a note of caution ahead of Wednesday’s report, expressing concerns about the corporation’s cash flow, whether Model 3 production can be sustained after Tesla reached the 5,000-cars-a-week milestone at the end of June, as well as sounding the alarm on gross margins. It remains to be seen whether the upcoming report will shift the momentum towards a positive direction.
Tesla comprises the Nasdaq 100. Year-to-date, the corporation’s shares are trading lower by 6.8%, underperforming the benchmark’s equivalent performance of +12.5%. Analysts’ mean price target on the stock is at $295.05.
Lastly, it should be kept in mind that Elon Musk’s earnings call during Q1 provided some unexpected “drama”, with the CEO expressing his discontent with “boring” questions, which he avoided answering. As a result, the stock market punished the company. This is rendering the second quarter’s earnings call all the more important.
Tesla’s earnings report for Q2 2018 will be going public after the US market close on Wednesday. The consensus recommendation for the company is “hold”, which negatively compares to the average consensus recommendation of the Auto & Truck Manufactures peer group.
The electric-vehicle maker’s earnings per share are anticipated to stand at -$2.89 during the quarter ending in June, according to Thomson Reuters consensus estimates; in other words, the firm is expected to record a loss. Current projections reflect a deterioration from $2.71 in losses per share from four weeks ago, while if forecasts are met, this would represent an increase in losses of around 117.5% compared to the same quarter last year when the corporation lost $1.33 per share. Additionally, EPS expectations range from -$3.44 to -$2.19. In the meantime, Tesla managed to deliver better results than Wall Street analysts’ profit estimates in three of the four previously reported quarters, while doing worse than forecasted once.
The firm’s quarterly revenues, anticipated at $3.96 billion from $2.79bn in Q2 2017, will also be scrutinized by investors; despite the automotive business making the bulk of revenues, sales stemming from the energy generation and storage segment will also be monitored. All in all and combined with the abovementioned, the consensus view is that the company will post much bigger losses on considerably larger sales. Meanwhile, similar to Q1, cash considerations will come to the fore. Does the corporation have enough cash for the year, or will it need additional financing? Should the latter be the case and given that CEO Elon Musk has indicated in the past that the firm will not require equity or debt financing this year, it will likely be perceived as a negative sign by market participants, weighing on the stock.
Other areas of interest will pertain to gross margins and net reservations (new orders minus cancelled reservations) for Model 3, this being the company’s vehicle that’s directed to the mass market and which has been facing production lags. In this respect, an update on production will also probably prove of importance.
Overall encouraging results by the carmaker are likely to spur long positions on its stock, with initial resistance to gains possibly coming around the $300 mark which may hold psychological significance. Not far above lie the current levels of the 100- and 50-day moving average lines – at $307.39 and $316.66 respectively – that may act as barriers to stronger bullish movement. Conversely, a weaker than anticipated report is expected to see the shares come under selling pressure. Support to losses could take place around the four-month low of $273.42 from May 22, with a downside violation increasingly brining into scope the 17-month low of $244.59 hit in early April.
Technically, the stock appears negative in the short-term – the RSI is in bearish territory and continues declining – and the medium-term – trading is taking place below the 50- and 100-day moving average lines. The shares lost 5.4% of their value this week (on Monday and Tuesday), falling in “sympathy” to other Nasdaq stocks that experienced losses on poor earnings, but also being dragged on the back of several Wall Street analysts striking a note of caution ahead of Wednesday’s report, expressing concerns about the corporation’s cash flow, whether Model 3 production can be sustained after Tesla reached the 5,000-cars-a-week milestone at the end of June, as well as sounding the alarm on gross margins. It remains to be seen whether the upcoming report will shift the momentum towards a positive direction.
Tesla comprises the Nasdaq 100. Year-to-date, the corporation’s shares are trading lower by 6.8%, underperforming the benchmark’s equivalent performance of +12.5%. Analysts’ mean price target on the stock is at $295.05.
Lastly, it should be kept in mind that Elon Musk’s earnings call during Q1 provided some unexpected “drama”, with the CEO expressing his discontent with “boring” questions, which he avoided answering. As a result, the stock market punished the company. This is rendering the second quarter’s earnings call all the more important.
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