September 26, 2023
London, UK

Tesla (TSLA) Third Quarter Earnings

TSLA Tesla target price

Tesla stock finished 0.93% higher at $222.20 after the announcement of the third-quarter financial results. The company reported adjusted earnings of $1.05 per share in line with expectations and the revenue came up to $21.45 billion slightly below the consensus, of $22 billion, but 26.8% and 55% above the second quarter and 2021 third quarter respectively. This is the first revenue miss for the company since the third quarter of 2021.

Tesla’s gross margin for Q3 was at 27.9% quarter-over-quarter but dropped year-over-year, as in the Q3 of 2021, the gross margin was 30.5%.

Elon Musk in the conference call said that the company is facing excellent demand for Q4 and forecasted that will sell every car that they produce in the foreseeable future. He expects a record-breaking fourth quarter and an epic end of the year. Musk added that sees a potential path for TSLA to be worth more than Saudi Aramco and Apple (AAPL) combined.

Tesla is expected to benefit from the announcement of $2.8B in grants to boost U.S production of EV batteries and other critical mineral supply chains.

What were the Analyst’s Expectations for Tesla Earnings

Analysts were expecting Tesla to report Q3 Earnings per Share of $0.99 (down from $1.06) on revenue of $22 billion (down from $22.7 billion). That revenue number would represent 59.5% growth from a year ago. The operating profit was estimated at $3.9 billion lower than the previous forecasts of $4.1 billion.

Tesla’s earnings expectations have been falling along with its stock price performance in the last three weeks. Tesla’s average analyst EPS estimate is down from the $1.05 previous expectations.

The company was expected a 77% earnings growth in 2022 (Year over Year), full-year 2022 sales expected to increase by 57% and another 40% in FY23 at $118.88 billion.

Tesla Production Figures Disappointed

Production figures published in early October by the company disappointed analysts and investors. The company delivered 343,830 vehicles below the Wall Street expectations of 365,000. In the third quarter (Q3) of 2021, the company delivered 241,300 autos.

Tesla also reported that produced 365,293 vehicles in the third quarter, well above the 237,823 cars produced in the third quarter of 2021. Analysts expected the vehicle production to be around 364,000.

The vehicles produced were: 19,935 Model S and X which are the most expensive models of the manufacturer and 345,988 Model 3 and Y, higher than last year’s 8,941 and 228,882 production.

Tesla stock has lost almost 37% since the beginning of the year and is down 26% in the last month. The company capitalization stands today at 689.96 billion and its P/E ratio stands at 79.89. The price to sales stands at 12.67. In 2022, the S&P 500 is down 22.72% in 2022 while the Nasdaq tech index has lost over 31.98%.

Wells Fargo reiterated Tesla (TSLA) at Equal Weight and reduced the price target for the stock from $280 to $230.

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