Tesla Electric Vehicle
Source: Tesla Twitter

Tesla (TSLA) Stock Forecast Before Its Q1 Earnings

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Apr. 23 2021, Updated 1:24 p.m. ET

Tesla (TSLA) is scheduled to release its earnings report for the first quarter of 2021 on Apr. 26 after the markets close. The company is reporting its earnings results amid renewed concerns about fatal accidents while being on Autopilot. What can investors expect from Tesla’s earnings report? Should you buy TSLA stock before the Q1 earnings release?

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The electric vehicle and clean energy company missed earnings estimates by nearly 20 percent in the fourth quarter of 2020. Meanwhile, Tesla had reported better-than-expected earnings in the previous four quarters.

buy tesla tsla forecast before q earnings
Source: Tesla Twitter
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Tesla’s Q1 2021 earnings estimates

In the first quarter, Wall Street analysts expect Tesla to post sales of $10.3 billion, which would be 72 percent higher than $6.0 billion in sales in the first quarter of 2020. Analysts also expect Tesla to post an adjusted EPS of $0.79 in the first quarter compared to $0.23 in the same quarter a year ago. In the fourth quarter of 2020, the company reported an adjusted EPS of $0.80 on sales of $10.7 billion.

In the first quarter, Tesla delivered 184,800 electric vehicles compared to 88,400 deliveries in the same period a year ago. The company delivered just 2,020 Model S/X in the first quarter while the rest 182,780 were Model 3/Y. Tesla was expected to report it had delivered 168,000 vehicles. The company produced 180,338 vehicles in the quarter.

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Tesla stock analysis is all over the map.

On Apr. 22, Morgan Stanley analyst Adam Jonas boosted its target price on Tesla stock to $900 from $880 and maintained an “overweight” rating on the stock. The analyst has raised his 2021 deliveries forecast by 3 percent to 809,000 vehicles, and noted that this is “modestly below consensus.”

On Apr. 20, Mizuho analyst Vijay Rakesh also raised its target price on Tesla stock from $775 to $820 and maintained a “buy” rating on the stock. The analyst believes that the company would report better-than-expected deliveries of electric vehicles in 2021. Rakesh expects 831,000 deliveries in 2021. Meanwhile, Citi has a “sell” rating with a price target of $159.

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buy tesla tsla forecast before q earnings
Source: Koyfin

TSLA Stock Price

Tesla doesn’t pay dividends

Tesla stock doesn’t pay dividends right now.

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Tesla’s stock price forecast is mixed

Wall Street analysts’ have mixed views on Tesla stock. According to estimates compiled by Market Beat, analysts' consensus target price is $370.59 for Tesla stock, which is 48.5 percent below its current price. Among the 34 analysts tracking Tesla, 12 recommend “buy,” 11 recommend “hold,” and 11 recommend “sell.” The highest target price of $1,000 is 38.9 percent above the stock's current price, while the lowest target price of $114 is 84.2 percent below the stock's current price.

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Should you buy Tesla stock?

Tesla stock trades at an NTM PE multiple of 168.7x. Even management acknowledged EV companies' soaring valuations. That said, being a growth company, we can't value Tesla based on NTM numbers.

If you believe in Elon Musk’s vision of disruption, Tesla might be a good investment. The company is expected to maintain its EV lead by 2025 too. However, if you believe that legacy automakers can capture a large market share in the EV space, Tesla stock might look overvalued.

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