No Surprises With Tesla (TSLA) Earnings, Smashed Top and Bottom Lines

Trade TSLA Stock Your Capital Is At Risk
Ollie Martin
Updated: 21 Apr 2022

Key points:

  • Tesla outperforms once again, topping estimates on top and bottom lines
  • The company reported EPS of $3.22 on revenue of $18.76B
  • Demand for Tesla has clearly never been higher, unwavered by rising prices and a growing waiting list

Whether you vouch for the almost enigmatic Elon Musk, or the monolithic presence of his EV brand; at this point, Tesla (NASDAQ: TSLA) is near-on unstoppable. The market cap king has long reigned supreme over the EV market, dominating global sales before the burgeoning transformation has forced other companies to edge their foot in the door. Worries surfaced regarding competition and potential undercutting as EVs grew more popular and consumers look for more affordable options. Yet still, Tesla delivers steller earnings, soaring past handsome expectations, once again leaving investors more than confident moving forward.

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Tesla smashed through analyst expectations on top and bottom lines. The company reported an adjusted EPS of $3.22, nearly $1 ahead of the $2.26 expected. The story was much of the same with revenue, recording $18.76B against the $17.8B expected. Automotive revenue jumped almost 90% from Q121 to touch $16.86B, with gross margins jumping to a record 32.9%. 

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When it comes to Tesla, it’s difficult to not judge the company in a league of its own. Results often don’t reflect wider market trends, it seems as if Tesla’s recipe for success hasn’t escaped Palo Alto. Really though, Tesla doesn’t hold any magical key to growth, and as untouchable as the company appears; it's simply a result of a well-engineered head start. If there's one word we can use to summarize Tesla’s omniscient rise, its reputation. 

Whilst consumers are struggling with rising car prices, the demand for Tesla’s has never been stronger, delivering 310,048 vehicles over the Q1; largely unaffected by the inflationary bubble that is weighing on current vehicle sales. 

Adding to existing promise, Tesla wasn't even operating at full capacity over the first quarter, with Musk noting that the company lost about a month of “build volume” in its Shanghai factory due to Covid-related shutdowns. Despite the setback – that could be crushing for other manufacturers – Musk remains confident that the company is on track to produce 1.5M cars in 2022; backed by an ever-growing waiting list.

Investors should be aware that Tesla is still climbing, and strength in TSLA stock shouldn’t be unnerving for buyers looking at low-risk entry points. The company has been operating under capacity for numerous quarters, providing an alluring insight into revenue growth at would-be full capacity and the long-term future upside of TSLA stock. 

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