I Know First Review: Review of TSLA Ahead of 1Q16 Earnings Report

I Know First Review

Tesla Motors, Inc. (TSLA) will release 1Q earnings on May 4th, 2016 after market close.

I Know First Review

Tesla, ultimately, had a strong quarter at the end of 2015. In the fourth quarter of last year, the company delivered close to 17,192 of their Model S cars, which was an increase of nearly 50% from the previous quarter. Many investors and consumers were disappointed by Tesla’s inability to deliver higher quantities of their newer cars, which CEO Elon Musk pointed out was a problem with their suppliers. This supplier issue dropped deliveries significantly in the third quarter, contributing to a 50% increase in deliveries from 3Q15 to 4Q15. Still, the company reported a 77% increase in deliveries on a YoY (year-over-year) basis from the last quarter of 2014 to the last quarter of 2015.

The company is getting ready to release their earnings report for the first quarter of 2016, after unveiling their newest and cheapest car, the Model 3, on March 31st. In less than a month following the unveiling, more than 400,000 reservations have been made for the car that is set to be released towards the end of 2017. Each reservation is placed along with a $1000 deposit that is essentially an interest-free loan that consumers are giving the company with the expectations that a car will be available for them within the next year or two.

Analysts expect to see deeper losses in this quarter. Those polled by Thomson Reuters expect to see an average loss of 57 cents a share and a revenue boost of 45% to $1.61 billion. Zacks Investment Research, meanwhile, expects a larger loss of 84 cents per share, up from a 70 cent loss in the same quarter of last year. These expectations seem like they come to fruition as Tesla works to prepare its factory for the production of the Model 3, and as they see increased cash flow coming from deposits for the new electric vehicle.

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