Will Tesla (TSLA) Beat Earnings This Quarter? - Analyst Blog
Tesla Motors, Inc. ( TSLA ) is set to report fourth-quarter 2013 results on Feb 19. In the trailing four quarters it posted an average surprise of +35.30%. Let's see how things are shaping up for this announcement.
Growth Factors This Quarter
Tesla recently revealed that vehicle sales in the fourth quarter of 2013 were 20% higher than estimated. The company sold and delivered 6,900 vehicles in the quarter, an improvement on the guidance of 6,000 units. This is the highest sales recorded by Tesla.
The demand for Tesla's cars remains strong due to robust performances and impressive designs. However, the electric carmaker is investing significantly in product development and expansion of its supercharger network, resulting in high research and development (R&D) and selling, general and administrative (SG&A) expenses. R&D and SG&A expenses are expected to sequentially increase 25% and 20% respectively, in the fourth quarter of 2013.
Our proven model does not conclusively show that Tesla is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate Estimate and Zacks Consensus Estimate are currently at 4 cents.
Zacks Rank #1: Tesla's Zacks Rank #1 (Strong Buy) when combined with a 0.00% ESP, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Dana Holding Corporation ( DAN ) has Earnings ESP of +4.44% and holds a Zacks Rank #3 (Hold). Dana Holding will be reporting fourth-quarter 2013 earnings on Feb 20, 2014.
Visteon Corporation ( VC ) has Earnings ESP of +5.48% and holds a Zacks Rank #3. Visteon will be reporting fourth-quarter 2013 earnings on Feb 25, 2014.
Power Solutions International, Inc. ( PSIX ) has Earnings ESP of +5.00% and holds a Zacks Rank #3. Power Solutions will be reporting fourth-quarter 2013 earnings on Feb 27, 2014.
DANA HOLDING CP (DAN): Free Stock Analysis Report
POWER SOL INTL (PSIX): Free Stock Analysis Report
TESLA MOTORS (TSLA): Free Stock Analysis Report
VISTEON CORP (VC): Free Stock Analysis Report
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