Tesla (TSLA) reports first-quarter earnings after the market closes today and Wall Street is expecting the worst. TSLA stock is down 53% from its all-time high after President Trump's victory in November.
While shares of the electric vehicle maker initially soared following the election, CEO Elon Musk's work for Trump helping to eliminate fraud, waste, and abuse in government spending has put Tesla in the crosshairs. It has been Musk, just as much as Trump, that Democrat politicians have targeted for criticism for these reform efforts, and that has created a brand crisis for the EV maker.
Already facing an industry-wide slowdown in EV sales, Tesla faces additional sales pressure due to Musk's efforts. Add in that current Tesla owners - on both sides of the political spectrum – have seen their vehicles vandalized by liberal activists in an attempt to ostracize the brand and dealerships have been attacked, there is more at play in TSLA's Q1 report than just numbers.
Tesla is expected to report revenue of $21.4 billion, per Yahoo! Finance estimates, just slightly higher than the $21.3 billion it produced last year. Analysts are looking for earnings of $0.42 per share compared to the $0.45 per share a year ago. Tesla, though, has missed expectations in three of the last four quarters.
Although Wall Street still assigns a buy rating to TSLA stock, with a $290 per share price target, implying 28% upside, most analysts this month have either downgraded their rating or cut their price targets.
While Tesla's sales and delivery numbers are weak, Musk is set to leave government service soon, which could eventually take him out of the political limelight, easing pressure on the company. Also, a new lower cost Model Y is due out this year, though Reuters reports its release has been pushed back. But with robotaxi services scheduled to launch in June and the potential debut of Optimus robots next year, there are potential catalysts for growth.
Tesla also has its energy storage business and solar roofing operations. While EVs, obviously, are the main component, it's not all bad, and this earnings report is not likely to be pretty. It may offer a lower stock price, which could be a chance to pick up TSLA stock at an attractive discount.
