Tesla's upcoming earnings report has attracted significant market attention, especially following a disappointing presentation on its Robotaxi initiatives. Investors are shifting their focus back to Tesla's fundamentals, examining demand outlook and profitability.
Analysts anticipate that Tesla's third-quarter revenue will reach $25.57 billion, marking a 9.5% year-over-year increase. However, earnings per share are expected to decrease by 12.1% to $0.58. The company faces challenges due to high production costs and aggressive pricing strategies, which are likely to compress its profit margins further. Tesla's gross margin is projected to drop to 15%, compared to 18% in the previous quarter.
Key topics for the upcoming earnings call include CEO Elon Musk's insights on the launch of a budget electric car, advancements in Full Self-Driving (FSD), energy storage business, and Robotaxi progress. Analysts suggest that detailed commentary on funds and mass production for Robotaxi and the humanoid robot Optimus could positively influence Tesla's stock, even if results fall short of market expectations.
Despite a rebound in Tesla's delivery numbers reversing previous declines, the figures still missed market expectations, with year-to-date sales dipping by 2.3%. The recent uptick in sales is attributed to promotional activities, which further strain profit margins. Analysts from GLJ Research predict a reduction in gross margin to 15%, while some optimistic views, like those from Barclays, foresee the potential for third-quarter results to act as a positive catalyst.
The earnings call will also focus on Tesla's latest developments in cheaper vehicle models, FSD technology, and the energy storage segment. The recent "Robotaxi day" event failed to impress Wall Street, with disappointments surrounding the lack of critical details on autonomous taxis and the absence of expected affordable models. However, Tesla's energy storage division could deliver positive surprises, having deployed 6.9 GWh in the third quarter—a 72.5% increase from the same period last year. Revenue from this segment is projected to hit $2.17 billion, up 39.1% year-over-year, with a healthy profit margin significantly higher than Tesla's overall margin.
