TSLA Stock Before Q3 Earnings: Buy Now or Wait for Results?

Tesla TSLA is slated to release third-quarter 2024 results on Wednesday, after market close. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at 58 cents per share and $25.6 billion, respectively.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The earnings estimate for the to-be-reported quarter has been revised upward by 1 cent over the past seven days. The bottom-line projection, however, indicates a year-over-year decline of 12.12%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year increase of 9.5%. Image Source: Zacks Investment ResearchFor the current year, the Zacks Consensus Estimate for TSLA’s revenues is pegged at $98.7 billion, implying a rise of 2% year over year. The consensus mark for 2024 EPS is pegged at $2.25, implying a contraction of around 28% on a year-over-year basis.In the trailing four quarters, this electric vehicle (EV) behemoth missed EPS estimates on all occasions, with the average negative earnings surprise being 8%.Tesla, Inc. Price and EPS Surprise Tesla, Inc. price-eps-surprise | Tesla, Inc. QuoteQ3 Earnings Whispers for TeslaOur proven model does not conclusively predict an earnings beat for Tesla. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.TSLA has an Earnings ESP of -1.28% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping TSLA’s Q3 ResultsIn the third quarter, Tesla produced 469,796 vehicles, including 443,668 Model 3/Y units. It delivered 462,890 vehicles (439,975 Model 3/Y and 22,915 other models) globally, missing the Zacks Consensus Estimate of 471,599 vehicles. Despite the miss, deliveries were up year-over-year for the first time in 2024 and rose 4.3% compared to the previous quarter.Tesla's automotive revenues for the to-be-reported quarter are projected at $22.2 billion, representing a 13% increase year over year. The company implemented price cuts and incentives to boost demand, which likely supported sales growth.  However, these actions may have put pressure on margins. The Zacks Consensus Estimate for Tesla’s gross margin in its automotive segment is 18.3%, down from 18.7% in the corresponding quarter of last year.While the automotive margins are expected to have been squeezed, Tesla's energy generation and storage business has been gaining traction. With strong demand for its Megapack and Powerwall products, revenues from this segment are estimated at $2.16 billion, implying a 39% increase year over year, while gross profit is expected to rise over 45%.Tesla's Services/Other unit is forecast to generate $2.3 billion in revenues (up from $2.16 billion recorded in the year-ago period), driven primarily by its expanding supercharging network. Major automakers like General Motors GM, Ford F and Stellantis STLA are adopting Tesla's NACS charging standard, boosting the segment’s outlook.Tesla Price Performance & ValuationYear to date, shares of Tesla have contracted around 11%, outperforming the industry and sector but lagging S&P 500’s growth.YTD Price ComparisonImage Source: Zacks Investment ResearchFrom a valuation perspective, Tesla looks a bit overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 6.38, higher compared to the industry’s 1.57 but lower than its own 5-year average.Image Source: Zacks Investment ResearchHow Should You Play TSLA Pre-Q3 Earnings?Indeed, Tesla is facing pressure from shrinking automotive margins, and its recent Robotaxi event left investors disappointed due to the lack of concrete details regarding its ridesharing platform. Elon Musk didn’t clarify key points such as the timeline for scaling robotaxi production, addressing regulatory challenges, or outpacing rivals like Alphabet’s Waymo.Despite these concerns, Tesla continues to make technological strides. The introduction of its humanoid robot project, Optimus, and its Full Self-Driving (FSD) Beta software (V12.5) rollout highlight the company's innovative advancements. Additionally, Tesla plans to accelerate the production of new affordable EV models that could drive future growth. Tesla’s Energy Generation and Storage business remains its most profitable segment, offering the highest margins, while its expanding NACS charging network is poised to further boost revenues. Tesla’s high liquidity and low leverage give the company flexibility to capitalize on new growth opportunities.As the third-quarter earnings approach, investors will focus on Tesla’s revenue growth, profit margins, and cash flow performance to gauge its overall financial health.Tesla’s stock experienced a sharp sell-off following the Robotaxi event on Oct. 10, signaling caution to some investors. However, Cathie Wood’s Ark Invest took advantage of the dip, purchasing nearly $3 million in Tesla shares. Ark Invest is known for buying on pullbacks or when stocks break below key moving averages. With Tesla’s stock down after the underwhelming "We, Robot" event, long-term investors may view this as a potential buying opportunity, regardless of what the upcoming results may reveal.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Stellantis N.V. (STLA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks