Tesla’s stock made a big move higher in the month leading up to the third-quarter delivery report, and Wall Street had already come to expect a beat
Tesla Inc.’s stock is shrugging off a slight beat on delivery numbers for the latest quarter, as expectations had become elevated heading into Wednesday’s report.
The company delivered 462,890 vehicles in the third quarter, slightly above the 462,000 units that analysts tracked by FactSet were expecting. The Model 3 and Model Y represented almost all of Tesla’s
TSLA-3.49% total, with those two vehicles combining for 439,975 deliveries.
Analysts had been rather upbeat on Tesla’s delivery prospects heading into the report, which marked a contrast from prior periods in which Wall Street was more pessimistic about demand. A Barclays analyst said last week that investors may have already expected a beat from Tesla for the latest period, and his own estimate of 470,000 units was higher than the number Tesla actually reported.
Wedbush’s Daniel Ives wrote after the report that Wall Street’s “whisper numbers” had been more in the vicinity of 465,000 to 470,000 units, rather than the 462,890 figure that Tesla posted. The company’s result was “good and a step in the right direction,” but “clearly we and the Street were hoping for [3,000 to 5,000] upside to this number,” he wrote.
Tesla’s stock had run more than 20% higher in the month leading up to Wednesday morning’s delivery report. Shares are down more than 3% shortly after Wednesday’s open.
The Barclays team expected Tesla’s delivery numbers to reflect “surprisingly robust” China trends, as well as the company’s U.S. ramp of its Cybertruck vehicle. A Piper Sandler analyst was also optimistic about Tesla’s China dynamics, predicting the company would see its “best quarter ever” in that market.
Tesla’s quarterly delivery report is a precursor to its actual earnings, which are due out on Oct. 23.
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While deliveries serve as an indicator of demand, they don’t tell the whole financial story. Investors are also highly focused on Tesla’s margins, and those will be revealed in the earnings report. The company has shown margin pressure in recent reports, and Deutsche Bank analysts recently predicted that Tesla’s “margin trajectory for the rest of the year could be flattish to down.”
“Import tariffs could hurt both Europe and U.S deliveries although this should be more” in the fourth quarter versus the third quarter, the Deutsche Bank team said. “Higher Cybertruck sales are also dilutive to mix. Meanwhile, raw materials, logistics and factory efficiencies from greater volume could serve as offsets.”
Tesla also reported production figures on Wednesday, showing that the company produced 469,796 vehicles in total during the third quarter, compared with the 410,831 units produced in the second quarter.