Tesla will report earnings on Jan. 29 and the stock is pricing in a lot. Several items will be in focus for investors.
The stock is up 120% in the past 3 months and trades at more than 80 times its expected 2020 earnings per share, as the company has started t prove its ability to turn a profit and execute on production goals.
Analysts polled by FactSet are looking for EPS in the December quarter of $1.65 and $6.78 for all of 2020, after seeing years of losses.
“The thing you can be sure of is that there’s going to be a big reaction to whether they post a profit or a loss,” TheStreet’s Tech Editor Nelson Wang said. “If you recall, in the third quarter is when they reported the surprise profit and that took their stock up 17% that day and has been the foundation for their current run-up. On the other hand, in the second quarter they reported a slight miss and they were down 14%, so the big thing seems whether they hit a profit or a loss.”
TheStreet’s Tech Reporter, Annie Gaus, says to watch for a few key items:
“Expectations are high for Tesla right now. Looking ahead, Tesla needs to prove a couple of things. One, they should show that they can shore up demand in the U.S. for their vehicles, which is still their largest market. 2020 is gong to be a newly competitive year in the EV [electric vehicle] market. We’ll see if Tesla can sustain their leading position. Another thing is whether they can continue to shore up profits. In the third quarter they did report a profit, but in doing so they did need to do a lot of cost cutting. In the meantime, they have a few expensive initiatives underway -- one of course is the China Gigafactory. Their profits as well as their cash flow will be two other closely watched aspects.”
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