Tesla (TSLA) reports first-quarter earnings after the market close Wednesday at a critical juncture for the electric-car maker.
XThe most intense focus will be on the pace and trajectory of Model 3 production. Tesla's lower-priced model has stumbled out of the gate and caused shares, as well as capital spending, to fluctuate.
The company reportedly plans round-the-clock production of the vehicle at its Fremont, Calif., auto plant. It's trying to ramp up Model 3 output to 6,000 a week, says a Bloomberg report that's based on a leaked email from Chief Executive Elon Musk.
"Even in spite of the CEO's leaked email detailing near-term production ramp, we don't yet have clear communication on where the company could go beyond the 5,000-plus per week range in the second half of the year," KeyBanc Capital Markets analyst Brad Erickson said in a note to clients. "Cash burn and trajectory of Model 3 production ramp remain the most likely impediment to the stock moving higher."
Wall Street expects revenue of $3.27 billion, up 18% from the year-ago period. Analysts polled by Zacks Investment Research see a loss of $3.37 per share. That compares with a loss of $1.33 in the year-ago period.
Tesla Production Issues
Market commentary in recent weeks has focused on Tesla's production issues and funding, Jefferies analyst Philippe Houchois wrote in his report.
"With Model 3 visible for months in stores nationwide, gross orders should be a telling indicator of underlying demand," Houchois said. He has a hold rating on Tesla and price target of 250. That's 18% below where the stock currently trades.
RBC Capital Markets analyst Joseph Spak has a sector perform rating on Tesla and price target of 305.
"Tesla is difficult to value and prone to sentiment and momentum," Spak wrote in a note. "Next trading move could be higher as one thing that recent spate of negative news may have done is lower expectations."
Shares were down 0.1%, near 300 during morning trading on the stock market today.
While the earnings call with analysts will likely focus on the company's numbers related to the Model 3 ramp, it might also provide some updates on the Model Y, which could begin limited production sometime in late 2019. Their might also be updates on the Tesla Semi, also expected to start production next year.
On Tuesday, Tesla was sued for more than $2 billion by electric-hydrogen truck startup Nikola Motor , which is claiming patent infringement over the design of its big-rig truck.
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