Stock Analysis & Ideas

Tesla Accelerating Toward Q3 Earnings, Expecting the Unexpected

Although impacted in the short term by macroeconomic forces, the green tidal wave in electric vehicles (EVs) is expected to continue permeating the auto industry for the foreseeable future. The global semiconductor shortage has been an obstacle, but Tesla, Inc. (TSLA) is weathering the storm and positioning itself for consensus-beating deliveries. The electric automaker is expected to report earnings after market close on Wednesday, October 20. (See Tesla Website Traffic on TipRanks) 

Delivering his optimism on the stock is Daniel Ives of Wedbush Securities, who is anticipating an impressive Q3 beat and raise come Wednesday. He attributes Tesla’s potential success to its monthly sales already exceeding expectations, and China’s rebound in EV deliveries.  

Ives rated the stock with a bullish Buy, and reiterated his $1,000 price target. This target represents a possible 12-month upside of 18.62% from current levels.  

With TSLA already seeing above Wall Street consensus metrics on Model 3/Y sales, the company is well poised for continued strong business performance. An overall beat would signal “an EV demand trajectory that looks quite robust for Tesla heading into 4Q and 2022,” mentioned Ives.  

While wait times for vehicles remain elevated, Ives expects the supply to better equalize with demand once the Austin and Berlin gigafactories are operational. For the upcoming earnings, the main catalyst for strong gross margins will be the output from the Chinese plants. He reiterated China’s significance to the firm, calculating that the massive nation will make up at least 40% of Tesla’s 2022 total deliveries.  

Ives sees the company as an obvious long-term EV stock play, writing that the “EV evolution is still in the early innings with Tesla leading the charge as today only 3% of automotive sales are EV globally and on a pace to hit 10% by 2025.” 

Using TipRanks’ unique data, website traffic to shows a decline of –6.84% quarter-over-quarter. This deceleration occurred while the stock valuation climbed 14.09% over that same period. Year-to-date comparison, however, has seen an increase in website traffic by 3.54%.  

Disclosure: At the time of publication, Brock Ladenheim did not have a position in any of the securities mentioned in this article 

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of Tipranks or its affiliates, and should be considered for informational purposes only. Tipranks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. Tipranks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by Tipranks or its affiliates. Past performance is not indicative of future results, prices or performance. 

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