What to Expect From Tesla Earnings

Cars and Drivers

Published: August 5, 2015 12:25 pm

Tesla Motors Inc. (NASDAQ: TSLA) is scheduled to report its second-quarter financial results after the markets close Wednesday. The consensus estimates from Thomson Reuters call for a net loss of $0.60 per share on $1.17 billion in revenue. The same period from the previous year had $0.11 in earnings per share on $857.51 million.

First of all, many on Wall Street ultimately think it is possible for Tesla, based on survey results, to sell 500,000 cars per year, a figure that has been a long time goal for CEO Elon Musk and Tesla. It implies only 0.5% of expected 2020 global light vehicle sales. That is a long way from the current 55,000 per year, but with new models on the way, and the company executing better in China, the analysts feel that the company can ramp up S/X production to 2,000 cars per week in the foreseeable future.

Now this company may be viewed with some caution by investors after its referral program came out last week. Some might consider it a move out of desperation or a clever tactic to increase sales. Even after several key analyst downgraded in recent weeks, many analysts have remained positive and see great things ahead for Tesla.

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Credit Suisse is one of the more positive firms out there. Dan Galves, the analyst rating Tesla for Credit Suisse, discussed this referral plan with reiterating its Outperform rating and its $325 price target.

Galves issued his thoughts on the Tesla referral experiment. He noted that Model S owners can share a link with potential buyers. Anyone ordering a Model S by October 31 through that link will receive $1,000 off the purchase price. Also, the referring person will receive $1,000 of essentially store credit. Galves also pointed out as a kicker that any person who facilitates 10 referral orders will be able to buy a Model X Founders edition at the price of a base Model X.

Again, the report effectively aims to minimize the “weak demand” fears that this might bring up. Galves’s own view is that this actually implies that there is evidence that points to strong Model S demand.

A few other analysts weighed in on Tesla as well:

Baird reiterated a Buy rating.
Evercore ISI reiterated a Buy rating with a $320 price target.
Deutsche Bank reiterated a Hold rating with a $280 price target.
JPMorgan has an Underperform rating.
Jefferies reiterated a Buy rating with a $360 price target.

Shares of Tesla were essentially flat at $265.93 on Wednesday ahead of the report. The stock has a consensus analyst price target of $287.88 and a 52-week trading range of $181.40 to $291.42.

ALSO READ: Where Automaker Stocks Are Headed After Earnings

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