Electric carmaker Tesla Motors
TSLA
is scheduled to report first-quarter 2022 results on Apr 20 after market close. Let’s take a closer look at its fundamentals ahead of the earnings release.
Tesla has been on a volatile ride and gained 0.8% over the past three months. The stock outperformed the industry’s average loss of 12.5%. The outperformance is expected to continue given the reasonable chances of an earnings beat and positive earnings revisions, which are generally a precursor to a beat ahead of an earnings report.
This has put the focus on ETFs —
Simplify Volt Robocar Disruption and Tech ETF
VCAR
,
Consumer Discretionary Select Sector SPDR Fund
XLY
,
Fidelity MSCI Consumer Discretionary Index ETF
FDIS
,
Vanguard Consumer Discretionary ETF
VCR
and
MicroSectors FANG+ ETN
FNGS
— with a substantial allocation to this luxury carmaker.
Earnings Whispers
Tesla has a Zacks Rank #3 (Hold) and an
Earnings ESP
of +0.21%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter
.
The electric carmaker saw a positive earnings estimate revision of 15 cents over the past seven days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The earnings track is robust for the company, which delivered a four-quarter average earnings surprise of 33.26%. Additionally, the Zacks Consensus Estimate for the first quarter indicates substantial year-over-year growth of 132.3% for earnings and 66.4% for revenues (see:
all the Alternative Energy ETFs here
).
Tesla has a top Growth Score of A and belongs to a bottom-ranked Zacks industry (in the
bottom 21%
). The Zacks Consensus Estimate for the average target price is $961.86, with nearly 42% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
While Tesla is poised for robust growth, its valuation remains high. The stock has a P/E ratio of 100.22 versus the industry average of 11.43.
Strong Q1 Production
Earlier this month, Tesla reported record deliveries for the first quarter, underscoring its strong growth and defying the global automotive semiconductor shortage that is hampering car production across the globe.
Tesla delivered a record 310,048 (295,324 Model 3 and Y, and 14,724 Model S and X) vehicles. This represents a slight increase from Q4, and was up 68% from a year-ago quarter. The electric carmaker produced 305,407 (291,189 Model 3 and Y, and 14,218 Model S and X) vehicles during the quarter (read:
5 ETFs to Ride on Tesla’s Record Q1 Deliveries
).
ETFs to Watch
Simplify Volt Robocar Disruption and Tech ETF (VCAR)
Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF, seeking concentrated exposure to the leader of autonomous driving technology. It employs a call option overlay to boost performance during extreme moves up in Tesla, while holding a tech index for diversification and put options as a hedge.
Simplify Volt Robocar Disruption and Tech ETF charges investors 0.95% in annual fees. It has accumulated $8.1 million in its asset base while trading in an average daily volume of 11,000 shares.
Consumer Discretionary Select Sector SPDR Fund (XLY)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index (read:
Will ETFs Gain as US Consumer Confidence Improves in March?
).
Consumer Discretionary Select Sector SPDR Fund is the largest and most-popular product in this space, with AUM of $19.2 billion and an average daily volume of around 12 million shares. Holding 60 securities in its basket, Tesla takes the second spot with 20.8% of assets. Consumer Discretionary Select Sector SPDR Fund charges 10 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS)
Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 329 stocks in its basket. Of these, TSLA takes the second spot with a 16% share. Internet & direct marketing retail makes up for the top sector with a 26% share, followed by automobiles (18.6%), specialty retail (17.7%), and hotels, restaurants & leisure (17.1%).
Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.4 billion in its asset base while trading in a good volume of around 136,000 shares a day on average. Fidelity MSCI Consumer Discretionary Index ETF charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 with a Medium risk outlook.
Vanguard Consumer Discretionary ETF (VCR)
Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 305 stocks in its basket. Of these, Tesla occupies the second position with a 16.7% allocation. Internet & direct marketing retail takes the largest share at 25%, while automobile manufacturers, restaurants and home improvement retail round off the next two spots.
Vanguard Consumer Discretionary ETF charges investors 10 bps in annual fees, while volume is moderate at nearly 119,000 shares a day. The product has managed about $6.1 billion in its asset base and carries a Zacks ETF Rank #2 with a Medium risk outlook (read:
5 ETF Areas Shining Bright as US Economy Looks Strong
).
MicroSectors FANG+ ETN (FNGS)
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket, with Tesla accounting for a 10% share.
MicroSectors FANG+ ETN has accumulated $64.8 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 27,000 shares and has a Zacks ETF Rank #3 (Hold).
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