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TheStreet Open House

Tesla Earnings Preview: What Wall Street's Thinking

NEW YORK ( TheStreet) -- Tesla Motors (TSLA) has been one of the strongest stocks this year, gaining 319.7% for the year as of close of trading Tuesday, as the hype surrounding the company has never been higher.

Last quarter, the Palo Alto, Calif.-based Tesla surprised the Street, as sales jumped 83% year-over-year to $562 million, earning 12 cents per share. The company said it produced 400 or more Model S vehicles a week, recognizing 4,900 cars as revenue.

The company also raised its global deliveries guidance to about 21,000 vehicles for 2013, up from its prior goal of 20,000 units.

Expectations for the quarter are high, with all eyes and ears on the Elon Musk-led Tesla. The stock has reached stratosphere level, led by positive reviews from the media and consumers and continued hype surrounding Musk. Though analysts polled by Thomson Reuters expect Tesla to lose 17 cents per share on $383.4 million in revenue, there is a lot of positive momentum that the company has built up.

Some analysts are expecting Tesla will again raise its year-end production target, especially as the company begins its expansion into Asian countries. Early last month, a Hong Kong-based sales manager said Tesla has received "hundreds of orders" for the Model S sedan already, despite having yet to establish a retail price for the car in the Chinese city.

TSLA Chart TSLA data by YCharts

Here's what some analysts on Wall Street expecting going into the print:

Wedbush Securities analyst Craig Irwin (Neutral, $110 PT)

"We are looking for 2Q13 rev/EPS of $385m/($0.21) vs. consensus $396m/($0.16). Tesla guided for a loss on delivery of around 4,500 vehicles as the factory will produce around 5,000 vehicles, but hundreds will still be in transit to European customers. This compares to 1Q13 when Tesla achieved its first profit on delivery of 4,900 vehicles. We model 2Q13 delivery of 4,700 Model S vehicles, with gross margins of 18.0% improving 90bps Q/Q on further gains in factory efficiency and reduced vehicle rework prior to or following delivery, offset by a moderate headwind from underabsorption of overhead for the inventory build and a less favorable options mix."

Deutsche Bank analyst Dan Galves (Buy, $160 PT)

"We've become increasingly confident in the near-term margin trajectory and that significant Regulatory Credit revenue can be maintained (compared to $85MM in Q1, we assume $35MM / $25MM in Q2 / Q3 and then flat at $17MM per quarter through 2016, which we see as conservative). We expect the gross margin trajectory to be better-than-expected over the course of 2013 and are raising our FY2013 EPS estimate to $0.17 from -$0.01 vs consensus in the breakeven range."

Baird analyst Ben Kallo (Outperform, $118 PT)

"We expect strong production and delivery and anticipate TSLA will be on track to exceed its FY guidance of ~21k Model S deliveries. We have modeled ~5,000 Model Ss produced/delivered in the quarter; however, our recent internal models and channel checks have led us to an estimate of ~5,550."

-- Written by Chris Ciaccia in New York

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