- Stock has been hurt after ‘We, Robot’ event flop
- Focus on EV sales volumes, margins and China reboot
- Quarterly earnings seen 10% lower year-on-year
With earnings season kicking into high gear, Tesla (TSLA:NASDAQ) remains a crucial one to watch for retail investors, with results due after the close of US markets on Wednesday (23 Oct).
Tesla shares have taken a hit this month, down 12%, following the unveiling of its long-awaited robotaxis, which some investors viewed as lacking in concrete details. Year-to-date, Tesla shares have underperformed the S&P 500, losing around 11% compared to the broader index’s 22.5% gain.
MARGINS AND CHINA SALES
Quarterly deliveries rose 6.4% in the quarter from a year before but missed expectations for stronger growth. The key focus will be on margins, which have been pressured, and on the outlook for a reboot in China demand.
After the disappointment of the ‘We, Robot’ event, investors will be hoping for better news on core EV sales. Last quarter the company reported a 7% drop in auto revenue as earnings fell short of estimates.
For this quarter investors are expecting a 10% decline in earnings. Barclays analyst Dan Levy notes that ‘there are outstanding questions on the volume outlook and path to margin recovery, and we also question the path to unlocking value from Tesla’s emphasis on AI-driven growth.’
