Tesla Motors Inc (NASDAQ:TSLA) releases its next earnings report on Tuesday, and analysts at Wedbush expect them to be in line with expectations. They’re especially expecting to see strong vehicle deliveries reported during the third quarter.

Tesla Motors

Expectations for Tesla’s report

Analysts Craig Irwin and Min Xu expect the automaker to report revenue of $583.2 million and earnings per share of 11 cents. That’s compared to consensus expectations of $534.6 million in revenue and earnings of 11 cents per share. They expect to see 5,850 Model S sedans delivered during the quarter with gross margins of 20.5%, compared to consensus of 22.4% gross margins.

Tesla Motors Inc (NASDAQ:TSLA) guided for delivery of 5,000 vehicles with gross margins of 20% for the September quarter.

Can Tesla meet its gross margin target?

The automaker said it is aiming for 25% gross margins by the end of the calendar year without the use of emissions credits, and the Wedbush analysts say this topic will be one of the most important ones on the company’s investor call. Analysts and investors will want to see visible progress in Tesla’s goal and hear positive comments from management about its ability to meet that goal.

The analysts point to Tesla Motors Inc (NASDAQ:TSLA)’s first vehicle, the Roadster, as an example of what the company can do. The automaker saw a $45,000 per vehicle improvement in production costs for that vehicle, not counting credits. Most of that improvement came in efficiency of assembly. They say this should provide a roadmap for Tesla as it aims for 25% margins by the end of the year.

Potential catalysts in Tesla’s results

So far, it looks like sales in Europe are increasing, and Irwin and Xu said they’ll be looking for more detail on timing for ramping up sales in Asia. Potential catalysts which could come during Tesla’s investor call include more details on possible locations and timing for the opening of more manufacturing facilities. They said additional information about the Model X crossover vehicle and the Generation III vehicle would also be beneficial for Tesla shares

They have reiterated their Outperform rating and $240 per share price target for Tesla Motors Inc (NASDAQ:TSLA). They see the automaker as still being in growth mode, which is why their using a multiple of 30 times on their 2017 estimated earnings per share and then discounting back four years with a 6% discount rate.