Tesla Motors Inc. Earnings: Is a Slowdown Coming?

Tesla stock has gotten hammered lately, but more worrying is whether a short-term growth slowdown could last longer than expected.

May 6, 2014 at 1:45PM

On Wednesday, Tesla Motors (NASDAQ:TSLA) will release its quarterly report, and shareholders have taken a pretty big hit over the past couple of months as the high-flying stock has gotten punished along with its other momentum-driven peers. Yet as Ford (NYSE:F) starts a dramatic move to introduce and update its offerings, and as General Motors (NYSE:GM) looks for ways to boost its own innovation, will Tesla stay in the driver's seat or give way to competition?

Tesla Motors has taken shareholders on a long roller-coaster ride, with shares going through long upswings punctuated by occasional dramatic drops. The latest 20% correction is actually relatively mild by Tesla standards. But fundamentally, Tesla is trying to sustain its growth at a fast enough pace to satisfy growth-hungry investors and to establish itself as the early mover leader in the electric vehicle space before Ford, General Motors, and other mainstream producers start entering the industry more seriously. Let's take an early look at what's been happening with Tesla Motors over the past quarter and what we're likely to see in its report.

Source: Tesla Motors

Stats on Tesla Motors

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$699.1 million

Change From Year-Ago Revenue


Earnings Beats in Past Four Quarters


Source: Yahoo! Finance

Will Tesla earnings surprise investors again?
In recent months, analysts have had mixed views on Tesla earnings. They've slashed their first-quarter estimates by almost two-thirds, but they've now set their full-year 2014 projections up 10% from previous levels and 2015 projections have gone up by almost 30%. The stock has jumped 16% since late January, but it's down 17% since early March as shares continue their wild swings in both directions.

Tesla's fourth-quarter-earnings report continued the automaker's string of strong fundamental performance. Although Tesla had initially believed it would struggle to reach 6,000 Model S deliveries in the quarter, the company set a new record of 6,892, helping to double its overall revenue. The company also reached its gross-margin target, hitting 25.8% as it hopes to keep climbing to 28% by the end of this year. Tesla has an ambitious production-ramp-up target, expecting 35,000 deliveries in 2014 and 50,000 vehicle production volume for the Model S in 2015. The Model X is also on schedule to start mass production early next year.

But arguably the most important development for Tesla Motors was the announcement of its Gigafactory for producing electric-car batteries. The move would dramatically increase supplies of lithium-ion batteries, cutting battery-pack costs and therefore potentially allowing Tesla to boost its margins further. It now appears that Nevada could become the home of the production facility, allowing it to be sustainable via solar power and putting it close to sources of lithium.

Tsla Giga
Source: Tesla Motors

Another key for Tesla is its network of Supercharger stations, which help speed up recharging for drivers. Tesla wants to have all but 2% of the U.S. population covered by Superchargers by the end of next year, and it's working hard on building out infrastructure in Europe for charging as well.

Tesla got good news in late March, when the National Highway Traffic Safety Administration closed its battery-fire investigation. With the Model S getting Consumer Reports' best safety rating, Tesla Motors hopes that it will be able to put battery fires behind it and refocus on growing its overall business.

In the Tesla Motors earnings report, watch to see how deliveries fare and whether the company changes its guidance for the rest of the year. So far, things look good for Tesla fundamentally in powering past Ford and General Motors in the electric-car space, but after a big share-price drop, investors want to see outpaced performance from the automaker going forward. If so, then the modest growth slowdown that analysts have projected might look completely unnecessary in hindsight.

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

Click here to add Tesla Motors to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Dan Caplinger owns shares of Ford. The Motley Fool recommends Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information