Saturday announced first quarter deliveries of about 310,000 vehicles, results that met expectations amid soaring petrol prices, new Covid restrictions and parts shortages that have created a volatile backdrop for the electric vehicle leader.
First quarter results set a quarterly record, up from about 309,000 delivered in the fourth trimester from 2021 and about 185,000 vehicles delivered in the first quarter of 2021. In the past four quarters, Tesla (ticker: TSLA) has delivered more than one million vehicles.
Wall Street was looking for a figure of around 310,000 units for the first quarter. Estimates dropped just before the data was released. About a week ago, analysts were forecasting around 315,000 deliveries. New Covid Restrictions in China as well as the persistence shortage of semiconductorswhich limited global auto production for more than a year, weighed on analysts’ estimates in late March.
Wedbush Analyst Dan Ives called the result “better than feared” in a Saturday report, noting that demand for electric vehicles continues to be robust.
Strong demand is a positive, but upcoming estimate changes at the end of the quarter make it difficult to know what investors were expecting to hear from Tesla.
Generally, strong deliveries equate to strong stock market performance, from the time deliveries are reported until Tesla releases its quarterly results about a month later. Seven of the last 10 times the company has exceeded Wall Street delivery expectations, the stock has outperformed the market over that time.
That was not the case after the fourth quarter numbers, however. Shares fell about 22% between the day after the release of deliveries and the day of Tesla’s fourth-quarter earnings report. the S&P500 fell about 9% over the same period.
Most growth stocks suffered with Tesla. the
fell 14% as Tesla stock fell 22%.
Regardless of how the stock traded, Wall Street reacted to the strong fourth quarter numbers. Analysts’ average target price for Tesla stock fell from about $863 just before the release of fourth-quarter shipments to about $954 per share just before the release of fourth-quarter results.
Analysts’ average price target currently sits at around $948. The $6 drop reflects, to some extent, moderating delivery expectations as well as rising inflation and concerns about how rising costs could hurt Tesla’s profit margins.
While expectation beats generally mean good things for Tesla stock, expectation misses mean the opposite. Tesla missed January 2019 delivery expectations. Shares fell 7% on the trading day following the release. The stock was down about 1% between the delivery release and earnings. The S&P 500 rose about 8% over the same period.
The company also missed Street’s April 2019 delivery expectations. Shares fell 8% on the trading day following the release. Tesla shares fell about 3% between the delivery release and earnings. The S&P rose about 1% over the same period.
It’s hard to say exactly what happens to Tesla stock in Monday’s trading and the following weeks ahead of the first quarter results. With the result in line, perhaps Tesla stock will do what the market has been doing for a few weeks. Such an exchange would be a bigger surprise than the outcome of the delivery.
Tesla hasn’t traded with the market in a while. Over the past three years, Tesla stock has gained about 1,775%. The S&P is up about 41% over the same period.
Year-to-date, Tesla stock is up about 3%. The S&P 500 and
are down about 5% and 4%, respectively.
Write to Al Root at [email protected]