Tesla Motors Inc Ahead Of Earnings: What Wall Street Wants

Tesla Motors Inc Ahead Of Earnings: What Wall Street Wants
Blomst / Pixabay

Tesla Motors Inc (NASDAQ:TSLA) already reported the number of vehicles it shipped during the fourth quarter, surprising Wall Street. The automaker is expected to report earnings of 18 cents per share on revenue of $657.15 million for the December quarter, but those aren’t the only numbers investors will be interested in. There are a number of other metrics that Wall Street will also be anxiously watching. Seeking Alpha contributor Jacob Steinberg focuses on several of them.

Looking ahead to 2014

Perhaps the biggest thing investors will be looking at in Tesla Motors Inc (NASDAQ:TSLA)’s earnings is guidance because they’re pretty much hanging all their hopes on the automaker hitting it big in the future. At this point, Tesla has delivered over 25,000 Model S sedans, and it is expected to deliver between 30,000 and 40,000 vehicles this year.

Hayden Capital 2Q22 Performance Update

unnamed 12Hayden Capital's performance update for the second quarter ended June 30, 2022. Q2 2021 hedge fund letters, conferences and more Dear Partners and Friends, The markets continued to sell-off in the second quarter, especially for internet-based businesses.  This year continues to be the toughest stretch for us, since the Hayden’s inception.  Inflation concerns and the Read More

Tesla Motors Inc (NASDAQ:TSLA) will need to keep scaling production up, hopefully producing 650 vehicles a week in the current quarter, 675 a week in the next quarter, 700 a week in the third quarter and 725 vehicles a week in the last quarter of the year. Steinberg expects Tesla to guide for approximately 32,000 vehicles this year, which would be a 50% growth rate. However, the automaker had suggested that delivers could be higher than that this year.

In the last quarter, Tesla Motors Inc (NASDAQ:TSLA) mentioned the possibility of building a massive battery factory, so investors will probably want to hear more about whether it has made any progress on this front as well.

Examining Tesla’s balance sheet

Steinberg also wants to see what Tesla Motors Inc (NASDAQ:TSLA)’s “deposit situation” is. The automaker recorded $140.28 million in customer deposits on its last balance sheet. Tesla delivered 6,900 vehicles during the quarter and collects $2,500 as a deposit for every Model S order. He notes that the amount of deposits on the company’s balance sheet will provide some clues about demand.

Tesla Motors Inc (NASDAQ:TSLA)’s cash position will also be important in next week’s report, as it keeps spending on setting up new Supercharger stations, building new showrooms in China and Hong Kong and increasing its production capacity. The automaker had $795 million in cash in the last quarter, and if that amount falls significantly, it might consider taking on more debt or issuing more shares.

If there are signs that Tesla Motors Inc (NASDAQ:TSLA) will issue more shares or otherwise do something to dilute its shares, this is something else that will interest investors. The automaker had 121.86 million diluted shares at the end of the last quarter and approximately 25 million outstanding stock options. Steinberg estimates that about 3 million to 4 million of those options may have been exercised during the December quarter.

Looking at Tesla’s operating activities, expenses

The author also notes that cash flow is going to be especially important because investors want to know if Tesla Motors Inc (NASDAQ:TSLA) is able to generate enough cash from the sales of its vehicles. Cash flow improved tremendously over the first three quarters, and Wall Street will be expecting another improvement here.

Operating expenses are, of course, a part of this picture as well. The automaker did say its operating expenses rose sharply during the quarter as it increased research and development and administrative expenses by double-digits sequentially because it is developing the Model X and continuing to enhance the Model S. The automaker’s research and development expenses are expected to have risen 25%, while its administrative expenses are expected to have risen 20%.

Updated on

Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
Previous article ABA Drops Lawsuit Against Volcker Rule
Next article Sands Casino Hacked, CEO Adelson Targeted

No posts to display