Tesla Q2 Earnings Preview: With Margins Shrinking, It’s All About 2024 Now
When analyzing Tesla’s (NASDAQ:TSLA) Q2 earnings tomorrow, the market won’t be particularly focused on the short-term implications of declining revenue growth and higher cost of revenues in the EV giant’s balance sheet.
Instead, analysts will be keener to assess whether the long-term Tesla story remains on track in the face of increasing competition and tighter margins.
This means that, as in Q1, a negative EPS surprise can be easily offset by the message that, despite the still challenging 2023, a bright 2024 is on the horizon. In fact, Tesla is expected to experience a 13% decrease in earnings during fiscal 2023, but there is optimism for a strong recovery with a projected 33% surge in FY24, resulting in earnings of $4.70 per share. Furthermore, the company’s total sales are anticipated to exhibit remarkable growth, with a projected 23% increase this year and an additional 25% climb in FY24, reaching an estimated $125.81 billion.
Moreover, there is an expectation that the Austin-based giant will show it has been able to keep improving its revenue mixture in H2, signaling greater resilience against a potentially slowing global consumer economy in H2.
Source: Counterpoint Analysis, Tesla
In that sense, positive surprise in revenue from car sales, positive developments on the partnership side—especially regarding the adoption of Tesla’s North American Charging Standard, and a slowing decrease in revenue incoming from regulatory credits could shadow the fact that margins will likely keep shrinking in 2023.
On top of that, Tesla shielded itself from a deeper selloff with the news on Monday that it had built the first Cybertruck at its Austin Giga Plant. Investors will be keen to discover Elon Musk’s production
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