Below is Validea's guru fundamental report for TESLA INC (TSLA). Of the 22 guru strategies we follow, TSLA rates highest using our Small-Cap Growth Investor model based on the published strategy of Motley Fool. This strategy looks for small cap growth stocks with solid fundament
Fisker (NYSE: FSR) is finally making cars, and there's hope this will be the kind of disruption the auto market needs. In this video, Travis Hoium covers why the business model is potentially better than competitors' and why Fisker is an EV stock to watch.
Stock markets on both sides of the Atlantic marched to different beats on Wednesday, with Wall Street futures trading sideways ahead of earnings from Tesla and Netflix and UK stocks and bonds rallying after a surprise drop in British inflation.
U.S. stock index futures were steady on Wednesday after Goldman Sachs reported second-quarter results, while investors also assessed strong earnings from a number of smaller banks.
Nissan on Wednesday became the first Japanese automaker to agree to adopt Tesla's electric-vehicle charging technology in the U.S. and Canada, joining global peers in expanding their fast-charger network to boost EV adoption.
September S&P 500 futures (ESU23) are trending up +0.08% this morning after three major U.S. benchmark indices ended the regular session higher as investors weighed the latest batch of earnings reports from major companies and digested U.S. retail sales data.
September S&P 500 futures (ESU23) are trending up +0.08% this morning after three major U.S. benchmark indices ended the regular session higher as investors weighed the latest batch of earnings reports from major companies and digested U.S. retail sales data.
(RTTNews) - Tesla Inc. (TSLA) will host a conference call at 5:30 PM ET on July 19, 2023, to discuss Q2 23 earnings results. Tesla is scheduled to report results on Wednesday, July 19, before market open.
U.S. stock index futures crept higher on Wednesday with all eyes on second-quarter results from Tesla and Goldman Sachs, a day after upbeat bank earnings helped the Dow post its longest winning streak in two years.
Fool.com contributor Parkev Tatevosian considers investments in Tesla (NASDAQ: TSLA) and Twilio (NYSE: TWLO), which are two stocks owned by Cathie Wood.
The past two years have featured no shortage of ups and downs for the investing community. The major U.S. stock indexes climbed to all-time highs in 2021, were clobbered by the 2022 bear market, and have rebounded strongly through the first six months and change of 2023.
Tesla has requested approval from German local authorities to make sweeping changes to its plant near Berlin including constructing a battery cell testing lab and extending water recycling and battery cell production, application documents published on Wednesday showed.
Stock markets were mixed on Wednesday with growth concerns dragging down China while elsewhere futures rose after British inflation came in surprisingly soft for once and U.S. data stoked hopes the world's biggest economy can avoid recession.
Tesla (
NASDAQ:TSLA
) earnings are today, with the
electric vehicle (EV) maker scheduled to announce its
second-quarter results after the market closes. Tesla impressed investors with
upbeat Q2 deliveries, thanks to price cuts that aimed to boost demand and make its EVs affordable to receive tax credits under the Inflation Reduction Act. However, several analysts are concerned about the impact of these price cuts on Q2 margins and the stock’s high valuation following a 136% year-to-date rally.
Expectations Ahead of Tesla’s Q2 Earnings
Tesla produced 479,700 vehicles in the second quarter. It delivered 466,140 units in Q2, marking an 83% year-over-year jump and a 10% rise from the prior quarter.
Analysts expect the company’s Q2
revenue to rise more than 43% year-over-year to $24.3 billion. The company’s
adjusted EPS is projected to rise about 4% to $0.79, as lower margins are expected to offset the robust growth in revenue.
On Monday,
Wells Fargo analyst Colin Langan raised his price target on Tesla to $265 from $170 but maintained a Hold rating. The analyst expects Tesla’s Q2 gross margin to decline to 17.5%, reflecting continued price cuts and a weaker mix. He anticipates Q2 EPS coming in at $0.75.
Langan also highlighted the 68% rise in the stock over the last two months due to better-than-anticipated Q2 deliveries,
multiple deals by Tesla to share its charging network with rival EV makers, reports about Model 2 launching by the end of 2024, and Model 3 SR qualifying for full EV tax credits. That said, Langan is concerned about Tesla's Q2 auto margin due to price cuts and is also concerned about volumes heading into the second half of the year.
Meanwhile,
Barclays analyst Dan Levy thinks that Tesla has a “tough set-up” heading into the Q2 earnings, as momentum in the stock has outweighed fundamentals. Like several other analysts, Levy also believes that Tesla’s Q2 auto gross margin will be the “key focal point.” He projects Tesla’s auto gross margin declining by 150 basis points quarter-over-quarter to 17.5%.
Levy sees the stock moving higher if Tesla reports flat margins and management commentary indicates that Q2 is the trough for margins. Conversely, he cautioned that the stock could go down if there are indications of persistent margin weakness. Levy reiterated a Hold rating on Tesla with a price target of $260 last week.
Technical Indicators Ahead of TSLA's Q2 Earnings
Ahead of the Q2 earnings release,
technical indicators reveal that Tesla is a Buy. According to TipRanks’s easy-to-understand technical tool, TSLA’s 50-Day EMA (exponential moving average) is 236.19, while its price is $290.38, making it a Buy. Further, TSLA’s shorter duration EMA (20-day) also signals an uptrend.
TipRanks’ Website Traffic Tool Insights
According to TipRanks’ Website Traffic Tool,
visits to tesla.com and shop.tesla.com were up 19% year-over-year in the second quarter, which bodes well for the Q2 revenue growth. However, it is important to note that website visits were up only 1.8% in Q2 compared to the first quarter of 2023.
Is Tesla Stock a Buy, Sell, or Hold?
Wall Street is sidelined on
TSLA stock, with a Hold consensus rating based on 12 Buys, 13 Holds, and five Sells. The average price target of $237.50 indicates a possible downside of 18.2% from current levels.
Conclusion
Tesla shares have enjoyed an impressive rally this year, driven by multiple factors including Q1 performance, Q2 deliveries, and deals involving the company’s Supercharging network with the likes of Ford (
NYSE:F
), General Motors (
NYSE:GM
), and Rivian (
NASDAQ:RIVN
). Nonetheless, analysts are focused on the impact of the price cuts on the Q2 gross margin.
Disclosure
Asia's stock markets were mixed on Wednesday with growth concerns dragging on China's equities while shares rose in Japan and Australia after healthy U.S. company earnings and retail data bolstered hopes the world's biggest economy could avoid a recession.
British inflation data this morning could be the toast of trading desks if it follows updates from the U.S. and Canada and surprises on the downside. A tentative rally in gilts is poised to extend and sterling could probably say goodbye to the strong side of $1.30.
The
T. Rowe Price Blue Chip Growth ETF (
NYSEARCA:TCHP)
is a relatively new, growth-oriented ETF from asset manager T. Rowe Price (
NASDAQ:TROW
) that has raced out to an impressive gain of nearly 40% year to date. There’s a lot to like about the ETF, but there are also some considerations that investors should think about before deciding whether to invest. Let’s take a look at why.
What Does the TCHP ETF Do?
Launched in 2020, TCHP is a growth ETF from T. Rowe Price that “seeks to provide long-term capital growth” with income as a “secondary objective.” According to T. Rowe Price, TCHP “focuses on companies with leading market positions, seasoned management, and strong financial fundamentals.”
TCHP's Top Holdings
TCHP holds 78 positions, but its top 10 holdings account for 63% of assets, so the fund is fairly concentrated. In fact, its top two positions, Microsoft (
NASDAQ:MSFT
) and Apple (
NASDAQ:AAPL
), combine to make up roughly 25% of the fund. TCHP isn’t alone in this regard, as Apple and Microsoft have accrued massive market caps with their gains this year and dominate the top holdings of many ETFs, but it's one thing that investors should be aware of.
Below, you can take a look at
TCHP’s top 10 holdings using TipRanks’ holdings tool.
As you can see, outside of Apple and Microsoft, the rest of TCHP's top holdings are dominated by other mega-cap tech names like Amazon (
NASDAQ:AMZN
), Nvidia (
NASDAQ:NVDA
), Alphabet (
NASDAQ:GOOGL
), Meta Platforms (
NASDAQ:META
) and Tesla (
NASDAQ:TSLA
), along with several other popular growth names like Visa (
NYSE:V
), Mastercard (
NASDAQ:MA
), and UnitedHealth Group (
NYSE:UNH
).
As you can see, these holdings boast some pretty impressive Smart Scores across the board. The
Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A score of 8 or above is equivalent to an Outperform rating. An admirable seven out of TCHP’s top 10 holdings feature Smart Scores of 8 or above.
TCHP itself features an Outperform-equivalent ETF Smart Score of 8 out of 10.
Is TCHP Stock a Buy, According to Analysts?
Turning to Wall Street, TCHP has a Moderate Buy consensus rating, as 74.51% of analyst ratings are Buys, 22.45% are Holds, and 3.03% are Sells. At $30.12, the
average TCHP stock price target implies 3.85% upside potential.
A Lot to Like, But…
With a strong portfolio, favorable views from analysts, and an Outperform-equivalent Smart Score, there is a lot to like about TCHP. However, looking beneath the surface, there is one major caveat that investors should consider before investing.
With a list of top holdings dominated by Microsoft, Apple, and other mega-cap tech stocks, TCHP isn’t all that different from many of the much larger and more well-known growth ETFs out there, like the
Vanguard Growth ETF (
NYSEARCA:VUG)
, the
Schwab U.S. Large-Cap Growth ETF (
NYSEARCA:SCHG)
, or even top tech ETFs like the
Invesco QQQ Trust (
NASDAQ:QQQ)
, for that matter.
There is plenty of overlap between these funds -- in fact, TCHP and VUG share eight of the same
top 10 holdings, TCHP and SCHG share nine of the same
top 10 holdings, and TCHP and QQQ share seven of the same
top 10 holdings.
As you can see, TCHP isn’t particularly differentiated from these popular funds. This wouldn’t be a major issue in and of itself if it wasn’t for another concern -- TCHP has a significantly higher expense ratio than each of these three alternatives. Now, TCHP is actively managed, so of course, it is going to have a higher expense ratio than these index ETFs, but with so much overlap between the funds, it’s somewhat difficult to make the case for a significantly higher expense ratio.
How much higher is it? TCHP has an expense ratio of 0.57%. This is over 10 times higher than the expense ratios for VUG and SCHG, which both charge just a minuscule 0.04%. It’s also nearly three times higher than QQQ’s expense ratio of 0.20%.
Clearly, TCHP is more expensive, but what does this look like on the ground? An investor putting $10,000 into TCHP would pay $57 in fees in year one, while an investor in QQQ would pay $20, and an investor in VUG or SCHG would pay just $4.
The disparity becomes even more pronounced over time as these fees compound over the years. Assuming the fees remain the same and each ETF returns 5% per year over the next ten years, the SCHG and VUG investors would pay just $51 in fees over the course of the decade. The QQQ investor would pay $255 in fees, and the TCHP investor would pay a significantly higher $714 in fees over a 10-year time frame.
Again, in fairness to TCHP, it is actively managed, so its fees are going to be higher than for an index ETF, but this is a pretty significant gap, especially given the fact that these funds don't look significantly different from a holdings perspective.
Furthermore, while they have low fees, QQQ, VUG, and SCHG have all been around for a long time and compiled excellent long-term track records when it comes to performance, with all three offering investors double-digit annualized returns for a decade or more. On the other hand, TCHP has only been around since 2020, so it has not yet compiled this type of reliable track record.
Investor Takeaway
None of this is to pick on TCHP, as it seems like a good fund and could yet go on to establish a fine track record of its own over the years, but it is worth pointing out that there are plenty of alternatives that offer investors similar exposure with lower costs and with longer track records. In and of itself, TCHP looks like a perfectly fine ETF, but investment opportunities never exist in a vacuum, and it's always important to consider alternatives.
Disclosure
Fool.com contributor and 25-year stock market veteran Eric Cuka shares the companies currently in the trillion-dollar club and the seven best stocks to buy that will likely join the ranks next.
According to a tweet from Tesla TSLA on Jul 15, the company has finally completed the construction of its first Cybertruck at its manufacturing facility in Austin, TX. According to Reuters, this achievement comes after a two-year
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