Tesla investors and analysts covering the stock are more interested in learning about the Model 3 and Gigafactory rather than the earnings numbers, according to The Los Angeles Times. Trip Chowdry, managing director at Global Equities Research, stated that the numbers “mean nothing right now.” Even Mark Spiegel, who has been skeptical about Tesla and is on the bearish side, believes the numbers posted by the company in any quarter hold a very little importance right now.
Why analysts see Tesla’s numbers as irrelevant
Analysts feel that the numbers are irrelevant because they mostly give an idea about the sales of two front-line products: the Model S and Model X luxury electric cars. However, there is no word on the heavy investments into new products, which will determine the company’s future. This turns into “bottom line” losses, but as long as these losses are not huge, Wall Street has no issues, says the LA Times.
Analysts are more interested in learning about the progress made on make-or-break products. One such product is the Model 3, which will be a mass-market offering that is expected to enter the manufacturing phase this year. The Palo Alto-based company is looking to sell hundreds of thousands of them annually.
Tesla’s next big project is making large batteries that will store electricity at home, utilities and businesses. According to some, batteries will be more prominent in determining Tesla’s future. The EV firm seems to be aware of this and has already started manufacturing them in large volumes at its Gigafactory in Nevada.
What analysts want to know
Most analysts believe that Tesla will move closer to achieving break-even on net income for the fourth quarter of 2016, compared to a $320 million net loss on $1.2 billion sales for the same period in 2015.
According to the LA Times, among the questions that analysts and enthusiasts want to know about the Model 3 are the timing of when the assembly line in the Fremont facility will be locked and loaded and when the company is planning to start production. They also want information on the number of Model 3 cars that will be manufactured and whether it will be enough for those who are waiting.
For the Gigafactory, the major questions that the analysts want to know are: how often Tesla is hiring manufacturing employees and whether the company is facing issues in training these employees. They also want to hear about the number of storage batteries that will be shipped this year.