As Tesla Inc.’s earnings day draws near, the stock is still in the black for the year, but investors are worried about the company’s plans for a robotaxi, the demand for electric vehicles (EVs), and Elon Musk, the company’s CEO, getting more involved in politics and causing trouble.
Thursday at noon Eastern Time, Tesla TSLA, +0.29% will report its earnings for the second quarter. There will then be a call with analysts at 5:30 p.m. Eastern Time. The call will be streamed live online.
The company that makes electric vehicles (EVs) reported earlier this month that deliveries, which are a proxy for sales, were much higher than what Wall Street expected. This led to a rally in the shares, which came to a screeching halt when news came out that Tesla’s robotaxi event had been moved from August to October.
In a later tweet, Musk seemed to confirm that the event had been moved. The CEO also backed Donald Trump for president in public.
Cantor Fitzgerald analyst Andres Sheppard said in an interview that delaying the August self-driving day was “disappointing,” but since it was only put off, when it does happen later in the year, it is still likely to be good for the stock.
He said that Tesla’s sales in the second quarter were good, even though they were still lower than the same time last year. This was in line with what the company had said about this year’s slower growth rate.
FactSet polled analysts and found that they think Tesla will report adjusted earnings of 61 cents per share on sales of $24.3 billion. This is lower than the adjusted earnings of 91 cents per share on sales of $24.9 billion in the second quarter of 2023.
In a recent note, analysts at Guggenheim had a different view on the robotaxi event delay. They said that the postponement could give investors “a chance to revisit near-term catalysts (which skew negative, in our view).”
There could be a miss on the gross margin for the quarter, there will be “continued price cuts/promos,” and deliveries in the third quarter will confirm the trend of lower sales year over year. This is what the Guggenheim analysts said about Tesla’s stock: “Sell.”
Cohn’s Sheppard said that there are still many good things about Tesla.
Before the earnings report, Sheppard said he was focused on Full Self-Driving, Tesla’s suite of advanced driver-assistance systems, and was pleased with the unexpected growth in Tesla’s energy storage business.
Sheppard said, “We want the company to give us a number for their FSD adoption rate.” Since the company has been lowering the prices of its cars, a steady flow of recurring revenue from FSD would help its margins and, by extension, its cash flow. Older models can also have FSD, which means an even bigger profit stream.
Tesla has been “somewhat in the middle” when it comes to being open about FSD, but “I’d hope that they quantify in some way” on earnings day.
For Tesla’s bulls and bears, FSD is the “most polarising” issue. It’s also what Sheppard hears most often from his clients who are investors.
FSD costs $99 a month, or $8,000 all at once.
Sheppard and a number of other Wall Street analysts also want to know more about Tesla’s stationary batteries that store energy.
When the company reported its quarterly sales earlier this month, it said that its energy storage products were used to store 9.4 gigawatt-hours of energy. This was the company’s highest quarterly deployment to date.
This is what Wall Street wants to know: “How is energy storage going and delivering? What’s the outlook for the rest of the year?” Sheppard spoke up.
As of late, many analysts, including those at Baird and Susquehanna, were positive about Tesla’s energy business.
The second half of the year is usually a better time for the auto industry, which is another good thing for Tesla and other car companies. That’s good news for Tesla and Rivian Automotive Inc. RIVN, -1.69%, which reports earnings for the second quarter on August 6, and Lucid Group Inc. LCID, -5.80%, which reports on August 5.
Shares of Tesla have gone up 0.7% so far this year, while the S&P 500 index SPX has gone up about 16%.
