Tesla TSLA is slated to post third-quarter 2024 results on Oct. 23, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at 58 cents per share and $25.57 billion, respectively.
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Tesla’s second-quarter 2024 earnings declined year over year and missed the Zacks Consensus Estimate. The EV behemoth delivered a trailing four-quarter negative earnings surprise of 7.99%, on average.
Tesla, Inc. Price and EPS Surprise
Tesla, Inc. price-eps-surprise | Tesla, Inc. Quote
Tesla’s Estimate Revisions
The Zacks Consensus Estimate for third-quarter earnings per share has moved up by a penny in the past seven days. The estimate for the bottom line, however, implies a year-over-year decline of 12.12%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year rise of 9.49%.
Factors to Shape TSLA’s Q3 Results
Tesla’s third-quarter deliveries reached 462,890 (comprising 439,975 Model 3/Y and 22,915 other models) units worldwide, up 6.4% and 4.3% on a yearly and sequential basis, respectively. But the deliveries missed our forecast of 471,559 units.
Our projections for automotive revenues indicate year-over-year growth of 13.1%. The metric is expected to be $22.19 billion. However, high production costs and the company’s aggressive price cuts across models are expected to have put pressure on its margins. We expect the automotive gross margin to shrink 40 basis points from the year-ago period to 18.3%.
Meanwhile, due to the strong reception of its Megapack and Powerwall products, Tesla's revenues from its Energy Generation and Storage business are on a robust growth trajectory. This segment is lucrative and boasts the highest margins. In the third quarter, its energy storage deployment reached 6.9 GWh, up 73.3% year over year. The strong performance of the Energy Generation and Storage business is likely to bolster the result of the third quarter. We expect revenues from the Energy Generation/Storage segment to be $2.17 billion, suggesting growth of 39.1% year over year. Our estimate for Services/Other unit is pegged at $2.3 billion, implying growth of 6.5% year over year.
What Does Our Model Say About Tesla?
Our proven model doesn’t conclusively predict an earnings beat for Tesla this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: Tesla has an Earnings ESP of -1.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Tesla currently carries a Zacks Rank of 2.
Stocks With Favorable Combination
While an earnings beat looks uncertain for Tesla, Allison Transmission Holdings, Inc. ALSN, Cummins Inc. CMI and Rivian Automotive, Inc. RIVN are some automotive players, that, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
ALSN has an Earnings ESP of +1.20% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is slated to report third-quarter 2024 results on Oct. 29. The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $2 per share and $783.42 million, respectively. ALSN beat earnings estimates in each of the trailing four quarters, with the average surprise being 10.58%.
CMI has an Earnings ESP of +3.91% and a Zacks Rank #3 at present. The company is slated to report third-quarter 2024 results on Nov. 5. The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $4.89 per share and $8.26 billion, respectively. CMI beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 1.07%.
RIVN has an Earnings ESP of +0.38% and a Zacks Rank #3 at present. The company is slated to report third-quarter 2024 results on Nov. 7. The Zacks Consensus Estimate for Rivian’s to-be-reported quarter’s loss per share and revenues is pegged at 88 cents and $1 billion, respectively. RIVN beat earnings estimates in two of the trailing four quarters and missed twice, with the average negative surprise being 0.42%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
