It has been about a month since the last earnings report for Tesla (TSLA). Shares have added about 9.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Tesla due for a pullback? 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 Q2
Tesla reported second-quarter 2021 earnings of $1.45, which surpassed the Zacks Consensus Estimate of 90 cents per share. Higher-than-expected automotive gross profit resulted in the outperformance. Precisely, automotive gross profit came in at $2,899 million, topping the consensus mark of $2,504 million. The bottom line also compared favorably with the year-ago earnings of 44 cents a share. Total revenues came in at $11,958 million, surpassing the consensus mark of $11,389 million. The top line also witnessed year-over-year growth of 98.1%.
Key Takeaways
Delivery and production totaled 201,304 and 206,421 vehicles, reflecting a year-over-year jump of 121% and 151%, respectively. Tesla reported stellar second-quarter 2021 production and deliveries despite global chip shortage, thanks to increasing popularity of green vehicles, preference for personal mobility, easier credit conditions, and economic recovery buoyed by accelerated vaccination drive as well as massive fiscal stimulus.
Model 3/Y registered production and deliveries of 206,421 and 199,409 vehicles, reflecting whopping year-over-year growth of 169% and 148%, respectively. Meanwhile, production and delivery of Model S/X fell 63% and 82% on a year-over-year basis to 2,340 and 1,895 units, respectively.
Total automotive revenues surged 97% year over year to $10,206 million for the reported quarter. This included $354 million from the sale of regulatory credits for electric vehicles, which decreased 17% year over year. Automotive gross margin was 28.4%, improving 298 basis points from second-quarter 2020.
Energy generation and storage revenues came in at $801 million for second-quarter 2021 compared with $370 million in the year-ago period. Services and other revenues were up 95.2% year over year to $951 million.
Operating expenses totaled $1,572 million for the quarter under review, up from $940 million in the corresponding period of 2020.
While Tesla has not provided any clear delivery target for 2021, 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 $16,229 million as of Jun 30, 2021 compared with $19,384 million on Dec 31, 2020. Net cash provided by operating activities amounted to $2,124 million for second-quarter 2021. Capital expenditure totaled $1,505 million. Importantly, firm generated free cash flow of $619 million during the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 8.09% due to these changes.
VGM Scores
At this time, Tesla has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Tesla has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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