Will Tesla Beat Or Miss? ETFs In Focus Ahead Of Q2 Earnings

Electric carmaker Tesla Motors (TSLA - Free Report) is scheduled to report second-quarter 2018 results on Aug 1 after market close. Let’s take a closer look at its fundamentals ahead of its earnings release.

Tesla has been witnessing a downside in the past three months, having shed 3.2% and underperforming the industry’s decline of 1.1%. The weak trend might continue as Tesla has less chances of beating estimates this quarter and has seen negative earnings revisions ahead of its Q2 report.

Earnings Whispers

Tesla has a Zacks Rank #3 (Hold) and has an Earnings ESP of -1.51%. According to our surprise prediction methodology, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 and a positive Earnings ESP is likely to beat earnings estimates. A Zacks Rank #4 or 5 (Sell-rated) is best avoided going into the earnings announcement, especially when the company is seeing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company saw negative earnings estimate revision from a loss of $2.68 to a loss of $2.70 for the yet-to-be-reported quarter over the past 30 days. Analysts lowering estimates right before earnings — with the most up-to-date information possible — is a not a good indicator. The Zacks Consensus Estimate for the second quarter reflects a substantial earnings decline of 103.01% from the year-ago quarter.

Additionally, analysts are increasingly becoming pessimistic on shares of Tesla ahead of its results. Over the past few weeks, analysts have not only lowered their revenue estimates and widened loss estimates for the to-be-reported quarter but have also reduced their price targets. According to analysts polled by Zacks, Tesla currently has an average target price of $306.29 with 35% of the analysts having a Strong Buy or a Buy rating and 31% of the analysts having a Strong Sell or Sell rating ahead of its earnings. All these suggest more pain ahead.

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