Will Tesla Finally Kick Into Gear With This Earnings Report?

By Chris Lange Updated Jan 12, 12:09AM EST · Published May 2, 12:25PM EDT

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Will Tesla Finally Kick Into Gear With This Earnings Report? — © courtesy of Tesla Inc.

Tesla Inc. (NASDAQ: TSLA) is set to report its first-quarter financial results after the markets close on Wednesday. Thomson Reuters consensus estimates call for a net loss of $3.48 per share on $3.22 billion in revenue. In the same period of last year, the electric car giant posted a net loss of $1.33 per share on $2.7 billion in revenue.

The automaker is also undergoing a patent dispute that could prove costly.

Earlier this month, China announced a plan to remove current restrictions on foreign carmakers that require the companies to form joint ventures with Chinese automakers in order to do business in the country. Lifting the restrictions is good news for Tesla, which does not have a Chinese joint-venture partner, because the requirement on electric vehicles ends this year instead of in 2022, when restrictions on makers of gasoline- and diesel-powered vehicles will disappear.

China is the largest foreign market for Tesla, and Tesla buyers already pay a 25% import tax for the U.S.-built vehicles and face another 25% on top of that if the government goes ahead with threatened tariffs on cars imported into the country. According to a report at The Detroit News, Tesla sold nearly 15,000 vehicles in China last year, accounting for about 17% of the company’s revenue. In February, China imported 2,323 U.S.-built electric cars, 2,160 of which were Teslas.

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The automaker already has faced some problems with its Model 3 production this quarter, but at last check everything on the production side seemed to be running smoothly.

Also, Jim Keller, the head of Tesla’s Autopilot semiautonomous-driving system, departed for Intel, adding some confusion to an integral part of Tesla that is already dealing with executive departures and safety questions.

Over the past 52 weeks, Tesla has underperformed the broad markets, with its stock down 7%. In just 2018 alone, the stock is down nearly 4%.

A few analysts weighed in on Tesla ahead of the earnings report:

Goldman Sachs has a Sell rating and a $195 price target.
Morgan Stanley has a Hold rating.
KeyCorp has a Hold rating.
Vertical Group has a Sell rating and an $84 price target.
RBC has a Market Perform rating with a $305 target.
Jefferies has a Hold rating with a $250 price target.
Nomura has a Buy rating with a $420 price target.

Shares of Tesla were last seen trading at $300.15, with a consensus analyst price target of $316.92 and a 52-week range of $244.59 to $389.61.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.