Tesla Earnings Preview: The Best of the Mag 7?

Core Viewpoint - Tesla has shown resilience in stock performance despite volatility, outperforming peers in the last six months after a challenging first half of 2024 [1][2] Group 1: Stock Performance - Tesla stock has outperformed the Magnificent Seven over the past six months, despite being the worst performer in the first half of 2024 [1] - The stock has experienced significant price appreciation, more than doubling in value since summer, but is currently consolidating and showing increased volatility [8][10] Group 2: Earnings and Financials - Tesla has the highest one-year earnings growth forecast among major competitors, excluding Nvidia, and is the only company with a positive Zacks Earnings ESP aside from Amazon [2] - The company has a mixed earnings history, beating estimates once by 24.14% and missing three times by as much as -16.13% over the last four quarters [3] Group 3: Business Segments and Growth Drivers - Tesla's Energy Generation and Storage business is its most profitable segment, with deployments growing at a 180% CAGR over three years [6] - The charging division is gaining traction as major automakers adopt Tesla's North American Charging Standard across a network of over 60,000 connectors [6] Group 4: Challenges and Competition - Tesla faces margin pressures and declining US EV market share, which has dropped to 50% from 63% in 2022, amid increasing competition from companies like BYD and NIO [7] - The Full Self-Driving system remains at Level 2, while competitors like Alphabet's Waymo have advanced further in autonomous vehicle technology [7] Group 5: Valuation and Investment Considerations - Tesla trades at an ultra-premium valuation of 125x forward earnings, indicating that much of the optimism may already be priced in [10][12] - The upcoming earnings event presents a challenging setup for investors, with a Zacks Rank 3 (Hold) rating reflecting mixed earnings revisions [11][14]