Tesla, Inc. TSLA is likely to release its third-quarter deliveries report either Tuesday or Wednesday, and most on the sell-side are optimistic about the company outperforming expectations.
What Happened: Tech venture capitalist and Deepwater Asset Management Managing Partner Gene Munster said in a post on X he is modeling a slight miss. He isn’t losing sleep over it. “This should be a ‘heads Tesla wins, tails they don't lose number’ because deliveries should return to growth.”
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The Street currently estimates Tesla’s third-quarter deliveries to come in at 465,000, a 7% year-over-year increase, Munster said. The tech investor said the final number could be 452,000, which though trailing the consensus, could still mark 4% growth.
If Tesla hits the Street number, investors will take it as a double positive, Munster said. Firstly, Tesla may have turned things around from a 9% decline in the March quarter and a 5% drop in the June quarter, he said. Secondly, Tesla has managed to grow deliveries despite CEO Elon Musk’s “increased political speak which has turned off some buyers,” he added.
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“The message is it would have been even better if not for the political speak,” Munster said.
If Tesla misses the consensus estimate, investors should be ok as long as deliveries grow year-over-year, the tech entrepreneur said. Firstly, it would mark a return to delivery growth for the first time this year and secondly, a large pat of the miss would likely be attributed to Musk’s political speak, he said. This political speak should eventually step back, or the rate of increased political chatter should decline or buyers just get used to it, he added.
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Tesla is confident of returning to growth, Munster said, citing comments from CFO Vaibhav Taneja on the second-quarter earnings call. The executive said the factors that improved growth from March to June should “persist into the September quarter,” the analyst noted.
Oct. 10 will see the official launch of Tesla’s robotaxis. Although expectations regarding the event is muted, most analysts are positive about robotaxis when the service eventually launches.
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Why It’s Important: One reason to hope for an outperformance is Tesla’s China strength. Commenting on robust Tesla insured vehicle registrations data from China, Future Fund LLC Managing Partner Gary Black said through 12 weeks, third-quarter deliveries were up 18.5% year-over-year and 19.9% higher than the previous quarter. Tesla is still on track to report China's best quarter ever, he added.
Sell-side analysts such as Barclays Dan Levy and Wedbush’s Daniel Ives all have called for a beat relative to expectations, citing China strength.
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Tesla shares have staged a nice recovery in the past week amid these upbeat forecasts and in anticipation of the 10/10 Robotaxi Day. After being in the red for much of the year, Tesla stock turned to the black last week. A sustainable uptrend hinges on the deliveries number, the Robotaxi Day announcements and the third-quarter earnings report that typically is released in the second half of October.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
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