As the financial world eagerly awaits the unveiling of Tesla Motors’ second-quarter results on the 23rd of July, the electric carmaker has been on a meteoric rise. Over the past three months, Tesla has outperformed the industry’s growth, soaring 65.3%. Particularly notable is the recent surge of 20.9% in share price this month, which has nearly erased the losses incurred in the first half of the year. If Tesla manages to beat earnings expectations, this upward trend is likely to persist. Encouragingly, earnings estimates for the upcoming quarter have been revised upward, hinting at a potential earnings beat.
Image Source: Zacks Investment Research
Earnings Projections
Tesla currently holds an Earnings ESP of -4.13% coupled with a Zacks Rank #3 (Hold). According to analytics, a positive Earnings ESP alongside a Zacks Rank #1, #2, or #3 elevates the likelihood of an earnings surpass. Recent estimates reflect a positive earnings adjustment of a few cents in the past month for the forthcoming quarter. However, the consensus estimate anticipates a notable year-over-year drop of 31.9% in earnings and a 0.8% growth in revenue. Moreover, Tesla’s track record reveals a historic average negative earnings surprise of 1.55% over the preceding four quarters.
Tesla’s Performance and Deliveries
In a positive development, Tesla disclosed stronger-than-anticipated vehicle delivery numbers earlier this month, indicating an upturn in demand that could alleviate concerns about excess inventory for its core Model 3/Y. The company globally delivered 443,956 vehicles, comprising 422,405 Model 3/Y units and 21,551 other models, during the second quarter. Although deliveries underwent a 4.8% decline from the same period last year, they exceeded analysts’ projections of 436,000. The dip in annual sales reflects heightened competition in the electric vehicle domain, necessitating improved profitability per vehicle sold.
Market Analyst Reactions
In light of the impressive delivery figures, numerous market analysts have revised their target prices for Tesla, signaling a potential turnaround for the company. Here’s a closer look at some exchange-traded funds (ETFs) closely attuned to Tesla:
Direxion Daily TSLA Bull 1.5X Shares (TSLL)
The largest U.S.-listed single-stock ETF, with an AUM of $2 billion, offering 1.5 times the daily percentage change of Tesla’s stock. Trading with an annual fee of 86 bps, TSLL witnesses an average daily trade volume of 40 million shares.
MeetKevin Pricing Power ETF (PP)
An actively managed ETF emphasizing U.S.-listed equity securities of innovative companies with a distinctive focus on “pricing power.” With Tesla claiming the second-largest share at 15.5%, PP has accumulated $47.4 million in assets, running at an annual fee of 77 bps.
Consumer Discretionary Select Sector SPDR Fund (XLY)
This fund mirrors the Consumer Discretionary Select Sector Index and positions Tesla as its second-largest holding, accounting for 18.2% of assets. Boasting an AUM of $20.4 billion, XLY charges 9 in annual fees and carries a Zacks ETF Rank #3 with a moderate risk outlook.
Simplify Volt Robocar Disruption and Tech ETF (VCAR)
Utilizing an active management strategy, VCAR concentrates on autonomous driving technology leaders while employing a call option overlay to maximize returns during Tesla’s upward swings. With an annual fee of 0.95%, VCAR boasts $5.8 million in assets and sustains an average daily trading volume of 2,000 shares.
ARK Innovation ETF (ARKK)
An actively managed ETF that invests in companies capitalizing on new product development, tech advancements, and scientific breakthroughs. With Tesla as its top holding at 14.5%, ARKK has accumulated…
The Impressive Rise of an ETF Dominator
An ETF Powerhouse Emerges
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Trading Volume like Never Before
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The Climb to the Top
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Looking Towards the Future
With such an impressive track record and strong market presence, the future looks bright for this ETF. As it continues to evolve and adapt to changing market conditions, investors can expect even greater things on the horizon.