Bulletin
Investor Alert

Economic Preview Archives | Email alerts

July 22, 2020, 6:42 a.m. EDT

Tesla’s earnings on tap this week: Will a loss end its blowout stock rally?

Tesla stock is on par with Google’s Alphabet and other companies that consistently post profits

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Tesla Inc. (TSLA)
  • X
    Toyota Motor Corp. ADR (TM)
  • X
    Dow Jones Industrial Average (DJIA)

or Cancel Already have a watchlist? Log In

By Claudia Assis, MarketWatch


Bloomberg News/Landov
Tesla Inc. vehicles out of company's plant in California in May.

Tesla Inc.’s second-quarter results come amid another massive rally for the stock, which has boosted the company’s valuation to nearly $300 billion.

The Silicon Valley car maker /zigman2/quotes/203558040/composite TSLA -2.48%  is expected to report quarterly numbers on Wednesday after the bell. A call with analysts at 5:30 p.m. Eastern will follow.

Tesla’s shares have quadrupled in price this year, with volume nearly tripling this week from a six-month average.

The rally has pushed the electric car maker’s market value to around $280 billion, making Tesla the most valued car company in the world after Japan’s Toyota Motor Co. /zigman2/quotes/200537742/composite TM +1.26% , which sold more than 10 million vehicles last year, including 2.4 million in North America.

Don't miss: Tesla at $2,000 is new ‘bull case’ for Morgan Stanley

Wall Street is calling for GAAP and adjusted quarterly losses for Tesla’s second quarter, but that hasn’t quelled hopes that Tesla could surprise markets with a quarterly profit, which would put the stock on track to join the S&P 500 index within three to six months. One of the criteria for the index’s inclusion is GAAP profitability for four consecutive quarters.

Joining a major index would get Tesla shares to the portfolios of thousands of index-tracking funds, and send managed funds scrambling to catch up with it as well.

Here’s what to expect:

Earnings: Consensus from 33 Wall Street analysts polled by FactSet calls for a GAAP loss of 80 cents a share, which would compare with a GAAP loss of $2.31 a share in the first quarter of 2019. The analysts expect an adjusted loss of 2 cents a share, which would compare with an adjusted loss of $1.12 a share a year ago.

Estimize, a crowdsourcing platform that gathers estimates from Wall Street analysts, as well as buy-side analysts, fund managers, company executives, academics and others, is expecting an adjusted profit of 18 cents a share.

Revenue : The analysts surveyed by FactSet expect sales of $5.15 billion for Tesla, down from $6.35 billion a year ago. Estimize sees revenue of $5.41 billion for the company.

Stock movement: So far this year, Tesla shares have gained 260%, a stark contrast with losses of around 7% for the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.17%  and breakeven for the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.06%  in the same period.

What else to expect: A clearer picture of the coronavirus pandemic impact on the company will likely emerge with the quarterly results.

For most of the three-month period, Tesla’s sole U.S. car-making factory in Fremont, Calif., was closed (and became a point of contention between Chief Executive Elon Musk and local health authorities, with the factory reopening against shutdown orders), with production from Tesla’s Shanghai factory offsetting some of the effects of Fremont’s closing.

The share rally, which started in December, most recently picked up steam after the company earlier this month reported better-than-expected second-quarter sales without Fremont at full speed.

/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 1,452.71
-36.87 -2.48%
Volume: 8.90M
Aug. 7, 2020 4:00p
P/E Ratio
756.03
Dividend Yield
N/A
Market Cap
$270.73 billion
Rev. per Employee
$439,627
loading...
/zigman2/quotes/200537742/composite
US : U.S.: NYSE
$ 129.96
+1.62 +1.26%
Volume: 214,856
Aug. 7, 2020 4:00p
P/E Ratio
9.72
Dividend Yield
2.77%
Market Cap
$179.68 billion
Rev. per Employee
$737,463
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,433.48
+46.50 +0.17%
Volume: 324.93M
Aug. 7, 2020 5:10p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,351.28
+2.12 +0.06%
Volume: 2.28B
Aug. 7, 2020 5:10p
loading...
1 2
This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.