Wednesday, October 30, 2013

Tesla Earnings Estimate for Q3

With Sharks Circling, Will Q3 Earnings Matter?

FSR Staff

On November 5th, we are looking for Tesla (TSLA) to report sales of 6,200 cars in the third quarter at an average selling price of $99,000 for gross revenue of $613.8 million. This is nearly 13% higher than Tesla's Q3 guidance of 5,500 cars and about 10% higher than Wall Street estimates of around $560 million in revenue. We see gross margins coming in at 23.5% and EPS zooming past current expectations of 11 to 12 cents per share. We project non-GAAP earnings of 25 cents/share for Q3. Gross margin is a tough figure to gauge. A half of percent change could change earnings by 3 cents per share in our model. We also estimate that about 9 cents a share or 37% of earnings will come from clean vehicle tax credits making the GAAP earnings number will come in closer to 16 cents a share for the third quarter. Despite the coverage earnings will receive, we are intermediate term investors with a price target and a timeframe that values the trend over the next year over the trade to make next week.

To reiterate, mindful of the overall promise of turbocharged growth, we would not be surprised if TSLA comes under pressure short term if earnings fail to beat by a wide margin. Future earnings guidance will also be key, and any hint of negativity in guidance, commentary, or concern raised in analyst Q&A could be used as a catalyst to pressure the stock. However, it is our view that the long term growth story for Tesla is intact and we have established at price target by early 2015 that we would like to share with you in our free newsletter.

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Foundry Stock Review and its contributors have no positions in Tesla (TSLA) the security detailed in this blog as of 10/30/2013.  Periodically, Foundry Stock Review or its contributors may initiate a position in a stock covered in this blog. If we do initiate a position in any security we cover prior to publication, we will disclose the position here in our disclosure. This stock disclosure is not a recommendation to purchase or sell any security.


Foundry Stock Review is an earnings focused investment newsletter. Foundry Stock Review, LLC is not a registered investment advisor and the data contained in this newsletter has been gathered from external sources and is believed to be accurate as of publication. The content of this blog is for information purposes only and is not a solicitation to buy or sell any individual securities. It is important that you consult with your investment advisor and tax advisor before making investment decisions. Past performance is not indicative of future results.

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