Another earnings period is here, with $TSLA being one of the most 𝗮𝗻𝘁𝗶𝗰𝗶𝗽𝗮𝘁𝗲𝗱 companies to watch. Let's take a look a the stock and business performance this year and what to expect when the company reports after market close tomorrow.
Tesla (TSLA) is a trailblazer in the electric car market and emerged as the biggest winner of 2020 in the auto industry despite the major downturn in the sector due to the pandemic. The auto manufacturer is ranked the fastest growing brand in several global 2020 rankings.
Tesla’s success in 2020 is evidenced by its ever-rising stock price and stands at around $439, which is 738% higher than it was 12 months ago. In the past 5 years, its stock has risen by 73.8% per year on average, and its market capitalization has increased to over US$400 billion. Tesla’s market cap is now larger than GM, Ford, and Fiat combined. This fact underscores Tesla’s meteoritic rise, and it is not done yet.
◾ 𝗧𝗲𝘀𝗹𝗮’𝘀 𝗤𝟮 𝗘𝗮𝗿𝗻𝗶𝗻𝗴𝘀 𝗥𝗲𝗽𝗼𝗿𝘁 𝗦𝗵𝗮𝘁𝘁𝗲𝗿𝗲𝗱 𝗦𝗲𝘃𝗲𝗿𝗮𝗹 𝗘𝘀𝘁𝗶𝗺𝗮𝘁𝗲𝘀
On July 22nd, 2020, Tesla issued its Q2 earnings report, and it shattered several estimates set by analysts for the quarter. The electric automaker reported revenue of $6.04 billion, beating Wall Street’s expectation of $5.12 billion by nearly a billion. Its stock has soared 400% in 2020 alone and more than doubled since July 1.
It reported earnings of $2.18 per share, while Wall Street was expected a loss of 12 cents. Tesla’s Q2 2020 earnings report was its fourth consecutive profitable quarter, which brought the company closer to being admitted to the S&P 500. On August 11, the company announced a 5-for-1 stock split that came into effect on August 31. The expectation of joining the S&P 500 coupled with stock split rallied its stock price to a 52-week high stock price of $502.49. Tesla delivered 90,650 cars in the quarter and outperformed estimates of around 70,000 cars for Q2 by over 20,000.
◾ 𝗪𝗵𝗮𝘁 𝘁𝗼 𝗲𝘅𝗽𝗲𝗰𝘁 𝗳𝗿𝗼𝗺 𝗤𝟯
Tesla is expected to issue its Q3 2020 earnings report on October 21. Its EPS is expected to increase from 37 cents reported in Q3 2019 to 56 cents for Q3 2020. Tesla’s revenue for the quarter is expected at $8.26 billion, which is a 31% increase year-over-year. Analysts are expecting EPS of 60 cents and believe that Tesla’s stock price can soar again before the end of 2020 to reach $700. Just like Elon Musk, Tesla is intriguing in its own unique way and will continue to entice interest for many years to come. Its growth speed, performance, projections, and the ever-increasing demand for electric cars make it an exciting stock to watch long-term.
◾𝗪𝗵𝗮𝘁 𝗺𝗮𝗸𝗲𝘀 𝗧𝗲𝘀𝗹𝗮 𝗮𝗻 𝗮𝘁𝘁𝗿𝗮𝗰𝘁𝗶𝘃𝗲 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁?
Tesla is the fastest-growing auto manufacturer and the darling of many investors for a reason. When it comes to investing in auto manufacturers, you have to analyze its output and preorders to understand what it holds in the future. Tesla delivered great results in Q2 even though it operated the entire quarter at limited capacity after the shutdown of its plant in Fremont, California.
The plant has returned to full production with additional machinery to ramp up production of its best-sellers – Model 3 and Model Y. The company is in the process of building a new plant in Texas and a mega factory for Model Y in Berlin. It recently started to make the Model 3 at its new factory in Shanghai to cater to the growing demand for the model in China and is also being expanded to manufacture Model Y.
Both Berlin and Shanghai plants will be delivering Model Y in 2021 and is on track to deliver Semi, its new big-rig truck model, also in 2021. The company recently launched its futuristic Cybertruck with 185,000 already preordered. It is also on track to start delivering over 130,000 cars per quarter and over 500,000 cars yearly.
One of Tesla's biggest advantages over rivals is its lead in battery technology and is perfectly positioned to take advantage of the expected increase in demand in the coming years. It has enough experience, resources, and expertise to lower the cost of its batteries significantly in the next few years. Low-cost batteries will extend its leadership in the battery sector and will contribute immensely to its growth.
Revenue from Tesla's energy business is increasing rapidly and is projected to reach over $200 billion in 10 years. It is projected to reach 2.5 million car deliveries and $100 billion in revenue by 2025. At this rate, Tesla could be making $500 billion-plus in revenue and can reach a $2 trillion market cap in 10 years.
𝘋𝘪𝘴𝘤𝘭𝘰𝘴𝘶𝘳𝘦: 𝘐 𝘰𝘸𝘯 𝘛𝘦𝘴𝘭𝘢 𝘪𝘯 𝘮𝘺 𝘱𝘰𝘳𝘵𝘧𝘰𝘭𝘪𝘰 𝘢𝘯𝘥 𝘵𝘩𝘪𝘴 𝘪𝘴 𝘮𝘺 𝘱𝘦𝘳𝘴𝘰𝘯𝘢𝘭 𝘷𝘪𝘦𝘸 𝘢𝘯𝘥 𝘢𝘯𝘢𝘭𝘺𝘴𝘪𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘤𝘰𝘮𝘱𝘢𝘯𝘺 𝘢𝘯𝘥 𝘴𝘩𝘰𝘶𝘭𝘥 𝘯𝘰𝘵 𝘣𝘦 𝘵𝘢𝘬𝘦𝘯 𝘢𝘴 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘢𝘥𝘷𝘪𝘤𝘦.