Can Tesla Pull Out Something Extraordinary in 3Q15?



3Q15 earnings

Tesla (TSLA) is expected to release its 3Q15 financial results on November 3. Tesla has been on fire since the beginning of 2013. Tesla’s stock outperformed legacy automakers by a huge margin. Apparently, Tesla churned out a net profit in only one quarter since the company was listed in 2010. This is in stark contrast to automakers like Ford (F) and General Motors (GM). They’re making record profits on the back of the strong growth in North America’s automotive market.

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3Q15 earnings season

So far, the earnings season in 3Q15 has been a mixed bag for the automotive industry. Ford’s (F) earnings came in slightly short of the market expectations. The stock fell more than 5% after the earnings release. Fiat Chrysler (FCAU) also fell after its 3Q15 earnings. The company posted a net loss on recall costs. However, General Motors’ 3Q15 financial results were met with jubilation in the markets. The stock rose 5.8%.

What to expect from Tesla

During its 2Q15 earnings conference call, Tesla revised its delivery targets downward for the rest of the year. This was negative for the markets. Tesla’s stock fell more than 8% after the earnings release.

Can the Elon Musk-led company come up with something extraordinary in 3Q15? Investors shouldn’t be valuing Tesla at more than 135% of Fiat Chrysler’s market capitalization for an ordinary performance. Just for the record, Fiat sold 1.1 million vehicles in 3Q15. This is more than double what Tesla expects to sell in 2020.

Currently, Tesla forms 0.61% of the iShares MSCI USA Momentum Factor ETF (MTUM).

In this series, we’ll explore how Tesla’s 3Q15 earnings could play out. We’ll also discuss analysts’ estimates and target price for Tesla.


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