Tesla Motors Inc Earnings Estimates Are All Over The Place

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Tesla Motors Inc (NASDAQ:TSLA) is scheduled to release its next earnings report on July 31. Analyst Andrea James of Dougherty & Co. is expecting the automaker’s results to be about in line with its guidance. She’s predicting about 7,500 deliveries, as Tesla guided for the quarter, and a reaffirmation of 35,000 deliveries for the full year.

Wide-ranging estimates for Tesla

James has been one of Tesla Motors’ biggest fans for quite some time. In her earnings preview, she maintained her Buy rating and $325 per share price target, which is roughly $100 higher than where Tesla stock is trading at right now. She said she thinks analysts who are Buy-rated on Tesla are expecting the second quarter to be marginally profitable, coming in with between $780 million and $800 million in revenue. On the other hand, she noted that Sell-rated analysts have a broader range.

Her estimates are for losses of 5 cents per share on $778 million in revenue. Wall Street estimates range from her estimate all the way up to a profit of 22 cents per share, which comes from Bank of America. The average is earnings of 4 cents per share. Revenue estimates for Tesla range from $740 million, which is Baird’s estimate, up to $933 million, which is Bank of America’s estimate. The average ends up being $811 million.

James estimates EBITDA of $12 million, or $49 million when excluding expenses from Tesla’s non-cash stock-based compensation.

Deliveries versus demand

The analyst doesn’t believe deliveries are a good indicator of demand for Tesla Motors’ vehicles, and she thinks Wall Street doesn’t understand it. She notes that the automaker aims to create “just enough to demand” so that it can keep ahead of production while also balancing the wait time for its cars. She said Tesla doesn’t want consumers to wait any longer than a month for their cars.

However, currently the wait time is approximately four months around the globe. She said this means that demand for Tesla’s vehicles has been increasing much faster than the automaker has been able to ramp up production.

James is expecting Tesla to update its progress in battling global wait times. Just days ago, the company announced that it was idling production temporarily so that it could improve production efficiency and capacity. She thinks the automaker still has plenty of demand levels it hasn’t pulled yet and notes that it doesn’t make sense for it to “over-stimulate demand” while production capacity remains limited. According to James, Tesla’s operations must be analyzed differently than other automakers because they are “fully penetrated,” while Tesla “has only scratched the surface on penetration.”

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