Tesla (TSLA) Earnings Preview: Where is the Street Setting the Bar?

Tesla reports earnings after the bell today, following market disappointment from Netflix (NFLX) and Texas Instruments (TXN) results. Although Tesla is in a different field, it still falls under that tech umbrella, and investors may be a little more nervous about its report.

The stock is up a modest 9% this year but has rallied 106% off of April lows and is only 9% off its all-time high from December. 

However, the Street has low expectations for the company, so it could be easier for them to surprise to the upside. Zacks expects Tesla to report EPS of $0.53, a 26% drop from last year, and revenue of $26.45 billion, a growth of 5%. Also important will be its guidance, including any remarks from Elon Musk as investors look for him to shift his focus back to the car company.

Electric vehicles are under pressure with the expiration of tax credits and a consumer environment where the top 10% are responsible for 50% of spending. General Motors (GM) recently reported it was taking a $1.6 billion loss related to changes to its EV rollout, even as their EV sales hit new records.

Tesla also disclosed 3Q production and deliveries earlier this month, which hit records. It delivered 497.1K vehicles and produced 447.5K. Demand may have been pulled forward due to the expiration of the aforementioned EV credits, so investors will be watching for management comments around demand projections.

Investors are also hoping for news around many of its promised projects, from cheaper models to Robotaxi deployments to its pivot towards humanoid robots. Tesla wants to be more than a car company, but it also needs to remain a good car company. The needle is tough to thread: if the Street is more interested in its robotics segment, it could punish the stock even if it reports strength in autos.

The options market is implying a move of +/- $26 dollars, or around a 6% move. Tune into Schwab Network for live earnings coverage and more!

Charles Schwab and all third parties mentioned are separate and unaffiliated, and are not responsible for one another's policies, services or opinions.