Can Tesla’s Revenues Meet Analysts’ Estimates in 2Q16?



Tesla’s revenues

So far in this series, we’ve looked at analyst expectations and recommendations for Tesla Motors (TSLA). Wall Street is divided. Despite supplier issues, the company’s vehicle deliveries have increased significantly in the last several quarters. This is reflected in its high revenue growth rate.

Let’s take a closer look at this trend before we explore analysts’ estimates for Tesla’s revenues in 2Q16.

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Existing trend

In 1Q16, Tesla reported GAAP (generally accepted accounting principles) revenues of $1.2 billion and non-GAAP revenues of $1.6 billion. In 1Q15, GAAP and non-GAAP revenues were $940 million and $1.1 billion, respectively.

Note that the difference between GAAP and non-GAAP revenues is due to the differential treatment of lease accounting. While GAAP mandates lease revenues to be recognized throughout the life of the lease, Tesla reports a non-GAAP set of numbers in which the company recognizes lease revenues as upfront revenues.

Currently, Tesla has only two EVs (electric vehicles): Model S and Model X. This is in contrast to the large vehicle portfolios offered by other legacy automakers (XLY) such as General Motors (GM), Ford (F), and Toyota (TM).

2Q16 estimates

Analysts are estimating that Tesla’s non-GAAP revenues will be $1.7 billion in 2Q16. This would be 40.7% higher YoY (year-over-year) than the $1.2 billion in revenues in 2Q15.

According to these estimates, Tesla’s revenue growth rate is likely to climb further in the coming quarters. In 3Q16, Tesla’s YoY revenue growth rate is estimated at 92.2%. These higher revenues could be seen as a result of picking up momentum in Model X deliveries as well as consistency in Model S deliveries.

Next, we’ll see what analyst expectations are for Tesla’s 2Q16 gross margin.


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