Tesla Inc!. Stock analysts have never been this divided. The self-driving electric vehicle maker is set to report earnings before end of month. The consensus EPS forecast for the quarter is $-0.99.
Below are two reasons why we and most analysts believe Tesla will report positive results for the first quarter, even though coronavirus outbreak has shutdown most business and wiped out several small business.
1) First Quarter Car Deliveries During Coronavirus Pandemic Was Very Positive
Electric vehicle maker Tesla Inc!. delivered 88,400 vehicles and produced 103,000 vehicles in the first quarter of 2020, beating analysts expectations despite coronavirus COVID-19 pandemic that has crippled world economies by putting pressure on demand and creating logistical challenges. Tesla’s Q2 deliveries will be insane :D.
“PALO ALTO, Calif., April 02, 2020 (GLOBE NEWSWIRE) — In the first quarter, we produced almost 103,000 vehicles and delivered approximately 88,400 vehicles. This is our best ever first quarter performance.”
Model Y production started in January and deliveries began in March, significantly ahead of schedule. Additionally, our Shanghai factory continued to achieve record levels of production, despite significant setbacks.
Our net income and cash flow results will be announced along with the rest of our financial performance when we announce Q1 earnings. Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct. Final numbers could vary by up to 0.5% or more. Tesla vehicle deliveries represent only one measure of the company’s financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.Tesla
Chief Bearish analysts, Adam Jonas of Morgan Stanley, who once upon a time had a price target of $10 on Tesla before upping it to $440 in March 24th during the Covid-19 outbreak in USA, estimated before the coronavirus outbreak that Tesla will deliver 89,000 cars in the first quarter of 2020 but Tesla ended up delivery 88400 cars in Q1 2020, which is super positive and beats Wall-Street estimates of 80,000 Q1 delivery.
2) Giga Shanghai Was Only Offline For Just 2 Weeks This Year
Tesla is currently running its production lines in two countries, USA and China. While USA gigafactories are literally offline at the moment and production is minimal due to the coronavirus outbreak in U.S., Giga Shanghai in China is running at close to max capacity.
The fact that Tesla was profitable last year in third quarter before Giga Shanghai construction was complete, makes it possible for Tesla to post a profitable first quarter earnings, because Tesla China plant is functioning 24/7.
Tesla started producing a standard-range-plus rear-whee-drive version of the Model 3 at its Shanghai factory late last year. The first deliveries began in early January.
Tesla has also started to deliver its icon Model Y to customers in the US ahead of its original schedule, and despite the world becoming increasingly wrapped up in the grips of the coronavirus pandemic.
First unveiled in March 2019, the Model Y is the company’s fifth all-electric car to go into production. It’s a small SUV built on the same technological platform as the Model 3 sedan, with the two cars sharing about 75 percent of parts. There are a few key differences, though, like a full hatch door at the rear (which is motorized), extra headroom, and an optional small third row with two shotgun-style seats.
Tesla CEO Elon Musk has said he believes the Model Y could potentially be an even bigger hit given the growing preference in the US (and, increasingly, the world) for the increased ride height, size, and functionality of SUVs.
Let’s not forget about the Solar Roof Panel ramping. While most Tesla Inc. Stock analysts are super focused on Tesla car deliveries, and bearish analysts are likely expecting Tesla 2020 first quarter earnings to miss, Tesla CEO Elon Musk is taking the Solar side of the business to another higher level.
What do you think about the Q1 ER?, do you agree with us that Tesla is going to post a positive earning reports?.