• Tesla is due to report Q4 2015 earnings on Feb 10th 2016 after market close.
  • Tesla stock has been selling off heavily going into the earnings call on account of Wall Street’s concerns regarding Model X production ramp and delivery, as well as the impact of the production of the new model on Tesla’s margins.
  • Are these concerns deserved and is Tesla still a worthwhile investment?
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    2016 Roadmap Should Be The Focus When Tesla Reports Q4 2015 Earnings

    Leading electric vehicle manufacturer Tesla (Nasdaq: TSLA) is slated to report Q4 2015 earnings on Feb. 10th 2016 after market close. Wall Street expects Tesla to report fourth quarter revenue of $1.82B, non-GAAP EPS of $0.10 and GAAP EPS of ($0.34). Tesla did not provide specific financial guidance for the quarter but gave general information about how it expects its production and deliveries to trend.

    Tesla has a mixed track record when it comes to meeting earnings estimates as shown in the chart below. The company missed earnings estimate by quite a big margin due to higher-than-expected costs in building its recently unveiled Model X.

    Tesla Quarterly Earnings Surprise History

    Fiscal
    Quarter End
    Date
    Reported
    Earnings
    Per Share
    Consensus
    EPS* Forecast
    %
    Surprise
    Sep2015 11/03/2015 -1.01 -0.71 -42.25 Jun2015 08/05/2015 -0.82 -1.39 41.01 Mar2015 05/06/2015 -0.7 -0.81 13.58 Dec2014 02/11/2015 -0.48 0.15 -420

    Source: NASDAQ

    Despite the earnings miss, Tesla shares spiked 10% following the earnings call because the company managed to exceed its delivery guidance. Under normal circumstances, Tesla investors usually focus more on the company’s deliveries with profits taking a back seat.

    But things are different this time round because Tesla’s fourth quarter delivery numbers are already known.

    Tesla had guided for deliveries of 17,000-19,000 vehicles during Q4, a target it has already achieved. Tesla announced in early January that it had managed to hit the low end of its guidance range after it delivered 17,400 vehicles during the fourth quarter. During its third quarter earnings call, Tesla had said that it intends to deliver per week 1,600-1,800 Model S and Model X vehicles combined in 2016, which works out 83,200-93,600 vehicles for the full year.

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