It has been about a month since the last earnings report for Tesla (TSLA). Shares have lost about 3.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Tesla due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Tesla Puts Up a Stellar Show in Q4
Tesla reported fourth-quarter 2021 earnings of $2.54, which surpassed the Zacks Consensus Estimate of $2.11. A higher-than-expected automotive gross profit resulted in this outperformance. Precisely, automotive gross profit came in at $4,882 million, topping the consensus mark of $4,254 million. The bottom line also compared favorably with the year-ago earnings of 80 cents a share.
Total revenues came in at $17,719 million, beating the consensus mark of $16,070 million. The top line also witnessed year-over-year growth of 65%. Importantly, the electric vehicle giant reported an automotive gross margin of 30.6% and overall gross margin of 27.4% for the quarter. Further, operating margin came in at 14.7%.
Key Takeaways
Production and delivery totaled 305,840 and 308,650 vehicles, reflecting a year-over-year jump of 70% and 71%, respectively. Tesla reported record-setting fourth-quarter 2021 deliveries, thanks to the soaring popularity of green vehicles and rising preference for personal mobility. In fact, fourth-quarter 2021 marked the sixth consecutive quarter of ground-breaking deliveries by the world’s most valuable automaker.
The Model 3/Y registered production and deliveries of 292,731 and 296,884 vehicles, marking year-over-year growth of 79% and 84%, respectively. Meanwhile, production and delivery of the Model S/X plunged 19% and 38% on a year-over-year basis to 13,109 and 11,766 units, respectively.
Total automotive revenues of $15,339 topped the consensus mark of $13,728 million and surged 70% year over year. The figure also included $314 million from the sale of regulatory credits for electric vehicles, which decreased 22% year over year. Automotive gross margin came in at 30.6%, expanding 648 basis points from fourth-quarter 2020.
Energy generation and storage revenues came in at $688 million for fourth-quarter 2021 compared with the year-ago period’s $752 million. The reported figure also fell short of the consensus mark of $828 million. Services and other revenues were up 57% year over year to $1,064 million and surpassed the consensus mark of $981 million.
Operating expenses totaled $2,234 million for the reported quarter, up from $1,491 million incurred in the corresponding period of 2020.
While Tesla has not provided any clear delivery target for 2022, it reiterated its goal of achieving 50% average annual growth in vehicle deliveries over a multi-year horizon.
Financials
Tesla had cash and cash equivalents of $17,576 million as of Dec 31, 2021 compared with $16,065 million on Sep 30, 2021. Net cash provided by operating activities amounted to $4,585 million for fourth-quarter 2021, up 52% year on year. Its capital expenditure totaled $1,810 million, up from the $1,151 million recorded in fourth-quarter 2020.
Tesla generated free cash flow of $2,775 million during the quarter, up 48.5% year on year. Long-term debt and finance leases — net of current portion on Dec 31, 2021 — totaled $5,245 million, down from $6,438 million on Sep 30, 2021
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 8.22% due to these changes.
VGM Scores
Currently, Tesla has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Tesla has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through 2021, the
Zacks Top 10 Stocks
portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report