Tesla Motors Inc revealed this morning that it will release its earnings numbers for the three months through June on August 5. With so many ups and downs in the firm’s stock in recent weeks, traders will be looking forward to the numbers to settle some key questions once and for all.
Here’s a look at the important numbers to watch for when the firm’s numbers finally appear, and what Wall Street thinks Elon Musk will show off after the market closes in New York on August 5.
Headlines matter at Tesla Motors
The headline numbers are going to be of prime importance at Tesla Motors this time around. We already know that the firm sold 11,507 cars during the three months through June. That number might be revised, but it’s not going to change in a big way when the firm reveals the rest of its numbers.
Wall Street is, by consensus, looking for a loss of 52 cents per share this time around. Sales are forecast to come in at $1.16B. In the same three months of last year Tesla Motors brought in sales of $810m and turned that into a profit of 11 cents per share. A profit is not likely this time around.
Listen to that cash burn
Tesla Motors doesn’t make any money. Every cent it has used so far has come from investors or credit, and the firm is still spending without hope of much return in the short term. The June quarter involved a lot of development on the firm’s Model X SUV and the Gigafactory. That means that a lot of cash was likely spent.
The question is how much? Tesla Motors managed to burn $400m in the first three months of 2015 and at that rate it’s going to be out of cash sooner rather than later. The launch and roll-out of the Model X is going to cost the firm a lot before it brings any cash back in.
Adam Jonas of Morgan Stanley called last quarter’s cash burn “eye-watering.” He might want to bring some Kleenex to the latest report from Tesla Motors .
The cash burn will dictate how long the firm has before it has to look for more financing. If the firm can get its cash flow into the green it will be able to stave off that need, but right now it is spending more than it brings in, and that’s going to be shown in the August 5 report.
Model X numbers
Tesla Motors is set to launch the Model X before the end of the third quarter and though the firm isn’t likely to surprise with a launch date on earnings, we may see some details about how sales are shoring up.
Tesla might open up the design studio for the EV SUV before the earnings report. With 20,000 units of the car already booked, that will be a big moment for the firm. If the car looks great, as most on Wall Street seem to assume already, it could drive booking numbers higher.
If the design studio is a flop some of those who have already put $5,000 down on the car may rethink their purchase. Tesla Motors should tell the world how many units of the car have been booked in its next report, and it might give some insight into the number of cars it expects to ship in the third quarter.
What are shares really worth?
Tesla Motors shares fell strongly on Tuesday, July 21 after a UBS report, authored by Colin Langan, said that the firm would have demand trouble going forward and advised clients to Sell their shares.
It’s clear that putting a price on Tesla Motors is hard. Most of the firm’s value is tied up in a risky idea of what the future will look like. Elon Musk has promised a lot about the future, but some on Wall Street thinks the company may be about there in terms of share price.
Tesla Motors shares move on every scrap of news that traders get their hands on, and past earnings reports haven’t been much more significant than the announcement of Ludicrous speed or various analyst reports.
Brad Erikson of Pacific Crest and Rod Lache of Deutsche Bank both said that Tesla Motors was fairly valued at around $280 earlier this month. Shares have fallen to $263 since then.
Earnings are an important point for Tesla stock, but because it’s so hard to put a value on them, it’s not easy to forecast the reaction of shares when numbers come out.
Update 12:27 EST: Added details of possible Model X reveals during earnings.