Examining Earnings Outlook

Tesla currently holds an Earnings ESP of -1.28% and a Zacks Rank #2 (Buy). According to Zacks methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2, or 3 (Hold) increases the likelihood of an earnings beat. The past seven days have seen a positive revision in earnings estimates by one cent for the upcoming quarter. Despite projecting a substantial 12.1% year-over-year decline in earnings, analysts anticipate a 9.5% growth in revenue. Historically, the company has fallen short of estimates with an average negative earnings surprise of 7.99% over the past four quarters.

Investors can utilize tools like Zacks’ Earnings Calendar to track the latest EPS estimates and surprises.

Insight into Tesla’s Performance

The flourishing third-quarter deliveries revealed Tesla’s resurgence after two successive quarters of decline. The company reported its third-highest quarterly delivery numbers in history, with a total of 462,890 vehicles (439,975 Model 3/Y and 22,915 other models) worldwide, marking a 6.4% year-over-year increase. While these figures depict a positive growth trajectory for Tesla, they slightly missed the estimated 463,310 deliveries, as per FactSet StreetAccount data. Tesla’s production for the quarter stood at 469,796 vehicles (443,668 Model 3/Y and 26,128 other models).

The resurgence in deliveries underscores the success of Tesla’s incentives aimed at bolstering consumer demand.

Key Areas of Interest

Investors eagerly await details concerning Tesla’s strategy for introducing an affordable electric vehicle priced below $30,000 and its overarching Cybercab vision following the recent unsatisfactory Robotaxi event. CEO Elon Musk recently unveiled prototypes of the Cybercab, Tesla’s new robotaxi, slated to hit the market for under $30,000 by 2026. Additionally, Tesla introduced the Robovan concept, a larger autonomous vehicle capable of accommodating up to 20 passengers simultaneously. These unveilings signify Tesla’s foray into the autonomous transportation market, positioning the Cybercab as an economical option for individuals seeking self-driving vehicles accessible via the Tesla network.

Tesla’s approach relies on its camera-based Full Self-Driving (FSD) system, distinguishing it from rivals like Waymo that utilize costly lidar and radar technologies. The company remains on schedule to kick-start production of new budget-friendly EV models in early 2025, built on Tesla’s cutting-edge platform and manufactured at the same sites as its current offerings.

Focus on ETFs

Direxion Daily TSLA Bull 2X Shares (TSLL)

Boasting assets under management (AUM) of $2.1 billion, Direxion Daily TSLA Bull 2X Shares is the largest U.S.-listed single-stock ETF on the market, providing twice (200%) the daily percentage change of Tesla’s common stock at an annual fee of 86 bps.

ARK Innovation ETF (ARKK)

As an actively managed fund, ARK Innovation ETF invests in companies benefiting from new product developments, technological advances, and scientific breakthroughs within DNA Technologies, Automation, Robotics, and other sectors. Tesla holds the top position in its portfolio at 13%, with a total AUM of $5.6 billion and an annual fee of 75 bps.

Consumer Discretionary Select Sector SPDR Fund (XLY)

Tracking the Consumer Discretionary Select Sector Index, this fund offers exposure to diverse consumer discretionary companies, with Tesla comprising 12.5% of its assets. Holding 50 securities, the fund has an AUM of $19.8 billion and charges an annual fee of 9 bps, sporting a Zacks ETF Rank #2 with a Moderate risk outlook.

Simplify Volt Robocar Disruption and Tech ETF (VCAR)

Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF emphasizing concentrated exposure to autonomous driving technology leaders, leveraging a call option overlay for enhanced performance.

Spotlight on Tesla’s Rise in ARK Autonomous Technology & Robotics ETF

Investment Strategy of ARKQ ETF

Operating as an actively managed exchange-traded fund, ARK Autonomous Technology & Robotics ETF aims for long-term capital appreciation. It focuses on investing in companies that stand to gain from product and service development, technological advancements, and scientific research in energy, automation, manufacturing, materials, and transportation sectors. The ETF holds a diversified portfolio of 37 stocks, where Tesla currently holds the top position with an 11.9% share. With assets totaling $785.3 million, this ETF imposes an annual fee of 75 bps.

Financial Performance and Fee Structure

On the financial front, Tesla has been making significant strides within the ARKQ ETF’s holdings, bolstering its overall performance. The ETF charges investors an annual fee of 0.75%, ensuring that costs remain contained while capitalizing on the potential growth opportunities present in the autonomous technology and robotics space.

Strategic Investment Moves

For savvy investors looking to navigate the market with caution, holding a tech index for diversification purposes coupled with put options for hedging can prove to be a prudent strategy. By adopting a well-rounded approach that includes a mix of assets, investors can mitigate risks while maximizing potential returns.

Future Outlook and Growth Potential

As Tesla continues to dominate within the ARK Autonomous Technology & Robotics ETF, its position signals promising growth potential within the autonomous technology and robotics sector. With an upward trajectory, Tesla’s influence on the ETF’s performance underscores its pivotal role in shaping the future of technology and innovation.