A month has gone by since the last earnings report for Tesla (TSLA). Shares have lost about 14.2% 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 Posts 7th Consecutive Profit in Q1’21
Tesla reported first-quarter 2021 earnings of 93 cents, which surpassed the Zacks Consensus Estimate of 79 cents per share. Higher-than-expected automotive gross profit resulted in the outperformance. Precisely, automotive gross profit came in at $2,385 million, topping the consensus mark of $2,090 million. The bottom line also compared favorably with the year-ago earnings of 25 cents a share. Total revenues came in at $10,389 million, surpassing the consensus mark of $9,920 million. The top line also witnessed year-over-year growth of 74%.
Key Takeaways
Delivery and production totaled 184,877 and 180,338 vehicles, reflecting a year-over-year increase of 109% and 76%, respectively. Tesla reported stellar first-quarter 2021 production and deliveries despite global chip shortage, thanks to increasing popularity of green vehicles, preference for personal mobility, easier credit conditions, and hopes of economic recovery buoyed by accelerated vaccination drive as well as fiscal stimulus.
Model 3/Y registered production and deliveries of 180,338 and 182,847 vehicles, reflecting a year-over-year increase of 107% and 140%, respectively. Meanwhile, the company did not produce any Model S/X during the quarter under review. Nonetheless, it delivered 2,030 units of the same, down 83% year over year.
Total automotive revenues surged 75% year over year to $9,002 million for the reported quarter. This included $518 million from the sale of regulatory credits for electric vehicles, which increased 46% year over year. Automotive gross margin was 26.5%, improving 95 basis points from first-quarter 2020.
Energy generation and storage revenues came in at $494 million for first-quarter 2021 compared with $293 million in the year-ago period. Services and other revenues were up 59.4% year over year to $893 million.
Operating expenses totaled $1,621 million for the quarter under review, up from $951 million in the corresponding period 2020.
While Tesla has not provided any clear delivery target for 2021, it just released a statement saying that it anticipates achieving 50% average annual growth in vehicle deliveries over a multi-year horizon.
Financials
Tesla had cash and cash equivalents of $17,141 million as of Mar 31, 2021 compared with $19,384 million on Dec 31, 2020. Net cash provided by operating activities amounted to $1,641 million for first-quarter 2021. Capital expenditure totaled $1,348 million. Importantly, firm generated free cash flow of $293 million during the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -15.53% 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 an F. Following the exact same course, 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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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