Tesla Motors Inc (NASDAQ:TSLA) reports its September quarter earnings tonight after closing bell, and investors are expecting a lot. In fact, Baird analysts say that the company’s current share price means the automaker is valued for a “flawless quarter.” Can Tesla deliver on expectations?
Expectations for Tesla
Analysts Ben Kallo and Tyler Frank expect Tesla Motors Inc (NASDAQ:TSLA) to deliver results that are in line with consensus. They’re looking for revenue of $547.9 million with adjusted EBITDA of $26.4 million. That’s compared to consensus estimates of $547.5 million and $11.8 million in adjusted EBITDA. They’re looking for earnings per share of 4 cents, compared to consensus estimates of 8 cents.
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They’re expecting to see that Tesla’s gross margins fell a bit quarter over quarter but expect the automaker to reaffirm its 25% target without zero emission credits for the fourth quarter. They think margins will fall because of lower revenue from those credits. Their gross margin estimate is 22.2%, while their operating margin estimate is 1.5%. That’s compared to consensus estimates of 21.7% in gross margins and .2% in operating margins.
Expectations for Tesla’s deliveries
The Baird analysts believe Tesla Motors Inc (NASDAQ:TSLA) delivered slightly more vehicles during the third quarter than it did during the second. However, their estimate is not as high as some of the whisper numbers they’ve heard, which go as high as 6,000 or more vehicles delivered during the third quarter. They believe the automaker delivered about 5,400 Model S sedans during the quarter.
They note that the reason bulls are expecting deliveries of 6,000 or more vehicles is because of issued VINs, but they believe that many of the vehicles which have been produced were used for showrooms or loaner vehicles at Tesla’s service centers or are still in transit en route to delivery.
Tesla to update on the Model X
When Tesla holds its earnings call this afternoon, the automaker is also expected to provide an update on production for the Model X crossover vehicle. Daniel Sparks of The Motley Fool reports about Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk’s recent store opening visit in London. At that event, Musk was asked about pricing for the Model X, and he said it would be “very similar” to that of the Model S, although the starting price will likely be “slightly higher” because the vehicle will only be offered as all-wheel-drive. This is an update from previous statements from Tesla’s website which stated that a rear-wheel-drive Model X would also be offered.
Musk also provided an approximate price range for the Model X. He estimated that the “slightly higher” starting price for the vehicle would only be higher by “a low-single-digit percentage.” Since the Model S starts at $70,000 without any tax credits, the Model X will probably start at around $74,000, assuming a 6% price increase.
Before Musk’s comments in London, Tesla Motors Inc (NASDAQ:TSLA) had provided few details about the Model X in terms of anything outside the vehicle’s specs. We do know that the vehicle is expected to hit the market late next year and that production of it next year will be limited and ramp up in 2015.
Tonight’s earnings call is also expected to bring updates on the build-out of Tesla’s storefronts and Supercharger network, and overall global demand for its Model S sedan.
Baird maintains Neutral rating
Baird analysts are maintaining their Neutral rating and $187 per share price target on Tesla Motors Inc (NASDAQ:TSLA). As of this writing, shares declined less than 1% in late morning trading.