Chicago, IL – April 21, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla TSLA, General Motors GM and Ford F
Here are highlights from Thursday’s Analyst Blog:
Electric vehicle (EV) and tech titan Tesla is slated to release first-quarter 2025 results on April 22, after market close. While Wall Street will focus on whether its earnings meet expectations, many investors are just as eager for CEO Elon Musk's answers to burning strategic questions. From progress on Full Self-Driving (FSD) updates and affordable EVs to updates on the Optimus robot and AI initiatives, the earnings call could provide much-needed clarity at a time when Tesla's stock is under pressure.
The Zacks Consensus Estimate for the to-be-reported quarter's earnings and revenues is pegged at 45 cents per share and $21.85 billion, respectively. The earnings estimate for the to-be-reported quarter has been revised downward by 8 cents over the past 30 days. The bottom-line projection indicates no change from the year-ago quarter's levels. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year increase of 2.6%.
For 2025, the Zacks Consensus Estimate for TSLA's revenues is pegged at $104.8 billion, implying a rise of 7.3% year over year. The consensus mark for 2025 EPS is pegged at $2.64, implying growth of around 9% on a year-over-year basis.
In the trailing four quarters, Tesla missed EPS estimates thrice and beat once, with the average earnings surprise being 0.8%.
Tesla, Inc. price-eps-surprise | Tesla, Inc. Quote
Our proven model does not conclusively predict an earnings beat for Tesla. The combination of a positiveEarnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That's not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
TSLA has an Earnings ESP of -11.69% and a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank stocks here.
(See the Zacks Earnings Calendar to stay ahead of market-making news.)
In the first quarter, Tesla produced 362,615 (345,454 Model 3/Y and 17,161 other models) vehicles. It delivered 336,681 vehicles (323,800 Model 3/Y and 12,881 other models) globally. The deliveries not just missed our expectations of 409,584 units, they were down 32% and 13% on a sequential and yearly basis, respectively. In fact, the first-quarter 2025 deliveries marked the weakest numbers in more than two years.
Low sales volume, along with generous discounts on its offerings amid a stiff price war, is expected to have weighed on automotive revenues and gross margins. However, Tesla has been making progress in reducing its cost of goods sold, which might have somewhat offset the pressure. We expect first-quarter gross margins from automotive sales to fall from 17.8% in the year-ago quarter to 15.8%.
On the positive side, Tesla's energy generation and storage business has been gaining traction. In the first quarter of 2025, the company deployed 10.4 GWh of energy storage products, up a massive 156% year over year. With strong demand for its Megapack and Powerwall products, revenues from this segment are estimated at $3.1 billion, implying a 90% increase year over year. Gross profit is expected to more than double.
Tesla's Services/Other unit is forecast to generate $3 billion in revenues — up 32% year over year — driven primarily by its expanding supercharging network. Major auto biggies like General Motors and Ford are using Tesla's NACS charging standard, boosting the segment's outlook.
Year to date, shares of Tesla have plunged roughly 40%, underperforming the industry, sector and S&P 500. The price performance also compares unfavorably with General Motors and Ford, which have lost 17% and 5%, respectively, in the same timeframe.
From a valuation perspective, Tesla appears quite pricey. Going by its price/sales ratio, the company is trading at a forward sales multiple of 7.04, higher than the industry's 2.18. Tesla is also significantly overvalued relative to General Motors (P/S ratio of 0.25) and Ford (P/S ratio of 0.23).
Musk's growing political involvement has dented brand appeal, with sales slowing in the United States, Europe and China. Disgruntled owners and increasing backlash have raised investor concerns.
As Tesla gears up for its first-quarter earnings call, investors are eager for clarity on several hot topics. Will the company provide an update on the long-awaited unsupervised FSD and the much-hyped Cybercab? Is Tesla on track to launch its affordable models? With global tensions and tariffs on the rise, how is the company preparing to stay agile? There's also growing curiosity around the Optimus robot as Musk previously said it could generate over $10 trillion in revenues. Does he still believe that? And has Tesla made any moves to license FSD to rivals? Investors are all ears.
First things first. Tesla's core EV business is under pressure from competition and sluggish demand. The brand's shine isn't what it used to be. Musk's high-profile role in the Department of Government Efficiency has become a growing concern, fueling worries about his divided attention, especially at a time when Tesla is struggling with low sales and competition challenges.
Tesla's long-term pitch now leans heavily on its autonomous driving ambition. For Tesla, 2025 is shaping up to be a pivotal year. It must prove that its AV technology works with no further delays.
Progress in FSD approvals and robotaxi development will be critical. The company plans to roll out unsupervised FSD in Austin this June. Last month, it secured the first of several approvals required to eventually launch its long-awaited robotaxi service in California.
Still, given recent delivery disappointments, valuation concerns and the potential for further near-term weakness, it may be wise for investors to wait for clarity from the first-quarter 2025 call before taking action. If results underwhelm—and Musk's commentary doesn't restore confidence—the stock could face more downside. Conservative investors may consider staying on the sidelines or even reducing exposure.
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