Tesla Motors Inc (NASDAQ:TSLA) shares started making gains this morning in pre-market trading after a rough day on Tuesday. The stock rose as much as 3.58 percent before opening bell this morning and then continued rising after the markets opened. The automaker will release its latest quarterly earnings this afternoon, so what can we expect?
Consensus estimates indicate that Tesla Motors is expected to report earnings of 3 cents per share on $493 million in revenue. The company announced earlier this year that its first quarter was set to be its first profitable one.
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Price Target Increases For Tesla Motors
Analysts have been raising their price target for shares of Tesla Motors Inc (NASDAQ:TSLA) right and left. Barclays raised its price target earlier this week to $65 per share, while Jefferies analysts increased their price target to $68 per share. Analysts at Robert W. Baird also increased their price target this week. All these price target increases indicate growing positive sentiment from analysts about the stock, although overall sentiment hasn’t turned completely around yet.
Tesla Motors And The Shorting Frenzy
In spite of all the price target increases and the excellent performance of Tesla Motors Inc (NASDAQ:TSLA), there are still a tremendous amount of shorts on the stock. We could see a short squeeze in the near future.
After the company releases its earnings this afternoon, it’s anyone’s guess about what the stock will do. We’ve already seen it rise so much this year that it may run out of steam, although it’s unlikely the bottom will fall out of it completely. On the other hand, investors have been eating up shares of Tesla Motors, so if the report is especially favorable, we could see shares skyrocket after the report.
What To Look For In Tesla’s Report
There are several things we should keep an eye on when the automaker releases its report today. One thing investors will be watching in today’s report is whether Tesla Motors provides any positive guidance. Consensus is for a loss of 43 cents per share for the full fiscal year, but if the company has a profitable quarter and is on track for a profitable year, guidance could be increased significantly.
Another big element of the report will be whether the company is still on track of its earlier prediction that it would deliver 20,000 of its new Model S vehicles this year. Investors will be looking to see whether the company has had a significant number of cancellations versus reservations.
Gross margin is another important area. It was a mere 8 percent in the previous quarter, and the company plans on getting to 25 percent by the end of the year. If Tesla is going to make that target, it needs to have made some headway in the first quarter of the year.
And finally, investors will want to see how much Tesla Motors Inc (NASDAQ:TSLA) made on selling its emission credits. This is one area that’s difficult to predict, so it could create some major upside for the company’s revenue. Tesla has made millions on emissions credits in the past, so it could continue to do so.