After the close today, Tesla (TSLA) is scheduled to report Q2 results.

For the quarter, TSLA is expected to report a loss per share of ($0.28) and revenue of $5.3 bln, equating to a yr/yr decline of 16.5%. Due to COVID-19, TSLA's Fremont, CA plant was shutdown from March 23 - May17, cutting into production.

• The key catalyst for TSLA's recent success hinges on soaring sales for its less-expensive Model 3 car in China. In May, TSLA sold 11,095 Model 3s in China, more than tripling the number sold in April.

TSLA has smashed analysts' EPS expectations over the past three quarters. After beating the EPS consensus by $2.19 in 3Q19, TSLA exceeded the EPS consensus estimate by $1.53 and $1.45 in 4Q19 and 1Q20, respectively.

TECHS:

Tesla is not a stock, it is a cult. The performance on this one has been moon-shot. Since the electric vehicle maker last reported earnings on April 29, the stock has rocketed higher, nearly doubling during this stretch. Given the massive rally, the bar will be set very high for TSLA tonight. It would be unwise for them not to do a secondary here.

RESULTS:

Tesla beats by $2.46, beats on revs, says target is still to deliver 500K vehicles in 2020

Reports Q2 (Jun) earnings of $2.18 per share, $2.46 better than the S&P Capital IQ Consensus of ($0.28); revenues fell 4.9% year/year to $6.04 bln vs the $5.31 bln S&P Capital IQ Consensus.

The positive impact of higher vehicle deliveries, higher regulatory credit revenue and higher energy generation and storage revenue was somewhat offset by lower vehicle average selling price (ASP) and lower services and other revenue.

Reports $535 mln increase in its cash and cash equivalents in Q2 to $8.6 bln.

Operating cash flow less capex (free cash flow) $418M in Q2.

Reports 5.4% operating margin in Q2.

• Outlook: Co says it has the capacity installed to exceed 500,000 vehicle deliveries this year, despite recent production interruptions. While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target.

  • Co expects operating margin will continue to grow over time, ultimately reaching industry-leading levels with capacity expansion and localization plans underway.

  • TSLA continues to build capacity for Model Y at Gigafactory Berlin and Gigafactory Shanghai, and TSLA remains on track to start deliveries of these vehicles from both locations in 2021.

    • The next US Gigafactory site has been selected and preparations are underway. Tesla Semi deliveries will also begin in 2021.

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