Tesla Motors Inc. (Nasdaq: TSLA) will report Q1 earnings on Wednesday, May 6, after the bell. Analysts predict an earnings-per-share (EPS) loss of $0.50 and revenue of $1.04 billion.
But for the Tesla stock price, it doesn't matter if the company meets those expectations.
TSLA stock is typically volatile following earnings, but the moves don't always coincide with earnings results. Last year, Tesla stock dipped more than 11% the day after reporting Q1 earnings that beat estimates by 20%.
At Money Morning, we recommend taking a long-term approach with Tesla stock. Day traders can play TSLA's wild swings, but they are often unpredictable. Any announcement or tweet from CEO Elon Musk will often move TSLA shares several percentage points in minutes.
The same happens after quarterly earnings. That's why we recommend looking at the long-term...
Looking Beyond Quarterly Earnings with TSLA Stock
In this week's Tesla earnings report, revenue is expected to climb 46% compared to last year. But analysts expect earnings to fall. Last year, TSLA had Q1 EPS of $0.12.
In the beginning of April, the company announced that it sold a record 10,030 cars during the first three months of the year.
And while Tesla stock price's short-term performance may hinge on those data points, last week's unveiling of "Tesla Energy" is much more important for TSLA stock long term.
Last week, Musk unveiled batteries called "Powerwalls" that will be installed in homes.
A 7-kilowatt-hour (kwh), wall-mounted version of the Powerwall will cost $3,000. A larger 10-kwh version will be sold for $3,500. This is far cheaper than traditional 7-kwh solar panel and battery packs, which can cost more than $10,000.
The units will be built using the same lithium-ion batteries that are used in Tesla cars.
Tesla will also sell much larger battery blocks for industrial use. Like Tesla's electric vehicle technology, all the patents on the Powerwalls will be open sourced.
"Tesla is not just an automotive company, it's an energy innovation company," the company said in a statement. "Tesla Energy is a critical step in this mission to enable zero emission power generation."
That's the outlook that has Money Morning's Chief Investment Strategist Keith Fitz-Gerald so bullish on the Tesla stock price...
The Tesla Stock Price's Incredible Potential
Tesla stock isn't for investors with low risk tolerance, or anyone who can't afford to be in the stock long term.
But for investors willing to take on some risk, this is a great stock to invest in.
"I believe Tesla is one of the best long-term investments an investor can make at the moment,"
Fitz-Gerald said in March.
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"I think Musk is the most innovative CEO on the planet and that he sees value others don't yet recognize," Fitz-Gerald said. "Cars, batteries, innovative business models - nobody knows where it will go but ultimately if you're along for the ride, I think it'd be very hard to go wrong over time."
Wall Street is starting to agree with Fitz-Gerald. Today, analysts at Jefferies initiated a "Buy" rating on TSLA stock and set a price target of $350. Stifel has an even higher target, at $400.
But it's also a stock that you need to be patient with. There will be price swings every month.
"Tesla is one of those companies that's great for an investor who wants to buy it and tuck it away," Fitz-Gerald said on FOX Business.
"Ten years from now this is going to be a very different company and people are going to be kicking themselves for having passed by being short sighted," Fitz-Gerald continued.
Money Morning Global Energy Strategist Dr. Kent Moors has also been touting the potential of Tesla's home batteries for months.
"In everyday use, the unit is expected to allow homeowners to store solar-generated power for use during high-cost periods, giving them the flexibility to use the conventional grid for cheaper, off-peak electricity," Moors said in February.
The completion of Tesla's battery plant, "the Gigafactory," will be another huge catalyst for the Tesla stock price.
"The Gigafactory is expected to have a dramatic effect on the energy storage market, helping to bring battery costs down by as much as half by 2020," Moors said.
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