Electric vehicle leader Tesla Inc TSLA is set to report fourth-quarter financial results after market close Wednesday, Jan. 24. The report comes after the company missed estimates in the third quarter and saw fourth-quarter deliveries beat analyst estimates.
Here's a look at the earnings estimates for the fourth quarter, what analysts are saying and key items for investors to watch.
Tesla Earnings Estimates: Analysts expect Tesla to report fourth-quarter revenue of $25.547 billion, according to estimates from Benzinga Pro.
Estimates call for the company to report 74 cents in earnings per share for the fourth quarter.
Tesla reported $1.19 in earnings per share and revenue of $24.318 billion from the previous fourth quarter.
The most recently reported third quarter saw Tesla miss estimates from analysts for both revenue and earnings per share, which were $23.35 billion and 66 cents respectively.
Tesla beat or matched earnings per share estimates in nine of the past 10 quarters. The company beat revenue estimates from analysts in seven of the past 10 quarters.
The company previously reported fourth-quarter production and delivery figures. Tesla reported deliveries of 484,507 units and production of 494,989 units. This represented year-over-year increases of 19.55% and 12.57%, respectively.
Related Link: Tesla Model Y Is Bestselling Electric Vehicle Of All-Time, Passing A Record Previously Held By The Musk-Led Company
What Tesla Analysts Are Saying: Deepwater Asset Management co-founder and Tesla investor Gene Munster has four main items he's looking at for Tesla's fourth-quarter earnings. Munster recently previewed the event and centered in on margins, the Cybertruck, FSD and other updates, and U.S. market share of electric vehicles.
"For Tesla earnings it's all about the margins. While I expect a slight improvement quarter over quarter, I believe the outlook for margins in 2024 will be for stabilization, not expansion," Munster said.
Munster calls for Cybertruck deliveries to hit 35,000 units in 2024, which he said is "not enough to matter." Munster said that of the two million people were on the waitlist for the Cybertruck, the real number will likely be sub-500k in the next six months due to pricing.
"My sense is they will not break out Cybertruck units in 2024, but it should be easy to back into the metric. This means that in 2024, Cybertruck will account for just under 2% of deliveries."
Munster sees an opportunity for Tesla with legacy automakers shifting their view on how quickly electric vehicle adoption hits the inflection point in the U.S.
"If Tesla is right, traditional carmakers are making a mistake by slowing their investment."
Morgan Stanley analyst Adam Jonas lowered the price target on Tesla shares from $380 to $345 ahead of fourth-quarter earnings.
The analyst, who had an Overweight rating, said there is evidence the global electric vehicle market is unfavorable due to growing supply and slowing demand.
The sum of parts price target for Tesla from Jonas includes valuations attributable to the company's automotive business, mobility, batteries, insurance and Tesla Energy. The price target does not include valuation for the Optimus Bot, which Jonas hopes to learn more about at the 2024 Tesla AI Day, scheduled for August.
Wedbush analyst Daniel Ives praised the fourth-quarter deliveries from Tesla as a "major achievement."
The analyst, who had an Outperform rating and $350 price target, also said China represented a "clear area of success" for Tesla.
"This was an important quarter for Tesla to show strong deliveries with clear momentum into 2024 as demand has upticked since 3Q based on all our global checks," Ives said.
One of Ives’ predictions for 2024 is Tesla introducing a sub-$30k vehicle by the end of 2024, which he said "could drastically change the unit volume game" for the company.
Key Items To Watch: Top shareholder questions ahead of Tesla's fourth-quarter earnings report include the timing of the next-generation vehicle launch, the number of Cybertruck orders, the timeline for FSD Version 12 being released and when the Tesla Semi will see mass production.
Cybertruck was a key topic during the third quarter results with a release date officially announced. While Tesla will not likely break out the number of Cybertruck deliveries in the fourth quarter, investors would like to hear more on delivery estimates for 2024 and how many people remain on the reservation list after official pricing came out.
Tesla surpassed its 1.8 million unit delivery estimate given for 2023. Investors will be anxiously awaiting a 2024 estimate from the company and if Tesla expects a year-over-year increase of double digits.
Another item to watch could be any commentary on Musk speaking of wanting more ownership of Tesla stock to increase his artificial intelligence initiatives with the company.
"I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can't be overturned," Musk recently said.
Ives said that if Musk creates more next-generation artificial intelligence projects outside Tesla, it "would clearly be a big negative for the Tesla story."
"We believe the Board and Musk will be able to resolve this issue over the next 3-6 months and ultimately all AI initiatives will be kept within Tesla," Ives said.
TSLA Price Action: Tesla shares traded down 2.18% to $207.56 on Monday versus a 52-week trading range of $134.27 to $299.29.
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