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Tesla earnings preview: Investors eye 2021 targets after record-setting year
Tesla (TSLA) is set to report fourth-quarter results Wednesday after market close, offering the last look at the electric car-maker’s performance at the end of a record-breaking year and early guidance for this year.
Here are the main results expected in Tesla’s report based on consensus estimates compiled by Bloomberg:
- Adjusted earnings per share: $1.01 expected vs. 43 cents year-over-year
- Revenue: $10.33 billion expected vs. $7.4 billion year-over-year
Tesla will likely post its first-ever quarter doing $10 billion in revenue and sixth straight quarterly profit, capping off a banner year for the company. Consensus analysts expect to see Tesla post more than $2 billion in quarterly adjusted EBITDA – a milestone which would trigger a massive payout for CEO Elon Musk, whose compensation plan is based in part on hitting certain operational targets.
Such a result would bring Tesla’s trailing four quarters of EBITDA to more than $6 billion, or enough to unlock his fifth tranche of options based on his vesting requirements. This would enable Musk to purchase another 8.4 million Tesla shares for a profit of nearly $7 billion, Reuters reported.
In 2020, aided by the production ramp-up of its Shanghai Gigafactory, Tesla reported record vehicle deliveries, broke ground at its forthcoming facilities in Germany and in Texas and joined the S&P 500 after months of speculation over its inclusion. The stock was rewarded with a more than 740% surge in 2020, and shares are already higher by 24% for 2021 to date.
“Given TSLA stock doubling again since November, we believe investors are grappling with where shares go from here. We believe bulls are betting on TSLA leading commercialization of autonomous vehicles technology,” Oppenheimer analyst Colin Rusch said in a note last week. Rusch more than doubled his price target on Tesla shares to $1,036 from $486. “While we continue to have misgivings about risks related to TSLA not incorporating LiDAR [Light Detection and Ranging] into its vehicles yet, we believe the learning cycles enabled by having over 1M vehicles on the road is an extraordinary advantage.”
Tesla’s vehicle delivery target for 2021 will be one of the key metrics investors eye in this week’s report. The company closed out 2020 by handing over 499,550 carsfor the full year, coming up just trivially short of the half-million figure many analysts on Wall Street homed in on as their target. Still, Tesla’s deliveries rose 36% versus 2019’s 367,500, growing during a time when the coronavirus pandemic pushed major legacy carmakers like Ford (F), General Motors (GM) and Fiat Chrysler (FCAU) to report full-year declines in auto sales.
“We believe the initial line in the sand for delivery unit guidance is in the ~750k range with upside bias given the growth we are seeing not just in China, but in Europe and the U.S. with EV [electric vehicle] demand accelerating globally,” Wedbush analyst Dan Ives said in a note Sunday. “There has been a massive appetite in the market for EV stocks led by Tesla over the past year as the demand trajectory for the EV sector continues to move markedly higher.”