U.S. Markets closed

Fall in Model 3 Delivery & High Expenses Affect Tesla (TSLA)

Zacks Equity Research

We issued an updated research report on Tesla, Inc. TSLA on May 6.

In first-quarter 2019, the company’s earnings and revenues missed the Zacks Consensus Estimate. However, on a year-over-year basis, earnings and revenues improved.

In first-quarter 2019, Tesla’s vehicle production and delivery numbers witnessed sequential declines of 10.9% and 31%, respectively. It managed to produce about 77,100 vehicles. This included 62,950 Model 3, and 14,150 Model S and X. Out of the total delivered figure of 63,000 units, Tesla’s Model 3 accounted for 50,900 while Model S and X were 12,100. During the quarter, this electric automaker struggled with Model 3 deliveries to Europe and China, owing to longer transit time.

In addition to this, some other factors affecting Tesla’s results are high research and development (R&D), and selling, general and administrative (SG&A) expenses. In fact, the EV manufacturer is investing heavily in increasing production capacity, the development of Model X and Model 3, the Gigafactory construction, and expansion of sales, services and Supercharger infrastructure. This escalated R&D and SG&A expenses.

However, Tesla occupied a substantial market share in the global electric cars market segment. The company is witnessing growing sales on the back of strong performance and impressive design of products.

In the past three months, Tesla stock has declined17% against 1.6% increase recorded by the industry it belongs to.


Tesla currently has a Zacks Rank #5 (Strong Sell). A few better-ranked stocks in the auto space are AB Volvo VLVLY, PACCAR, Inc. PCAR, and Geely Automobile Holdings Ltd. GELYY. While Volvo currently sports a Zacks Rank #1 (Strong Buy), PACCAR and Geely carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Volvo has an expected long-term growth rate of 5%. Over the past three months, shares of the company have gained 9.4%.

PACCAR has an expected long-term growth rate of 8.4%. Over the past three months, shares of the company have gained 5.3%.

Geely Automobile has an expected long-term growth rate of 7%. Share price of the company has increased 14.8% in the past three months.

Radical New Technology Creates $12.3 Trillion Opportunity

Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.

Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.

See the 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
PACCAR Inc. (PCAR) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Geely Automobile Holdings Ltd. (GELYY) : Free Stock Analysis Report
AB Volvo (VLVLY) : Free Stock Analysis Report
To read this article on Zacks.com click here.