Tesla Delivery Results Are Coming. Investors Want Growth. — Barrons.com

Tesla’s first-quarter delivery report is coming. It better show year-over-year growth or investors will get grumpier than they already are.

Looking at the current consensus calls from Wall Street, growth shouldn’t be a problem. However, there’s a rub. That consensus may be too optimistic.

Heading into Tuesday’s report, Wall Street expects about 457,000 units, according to FactSet, up from 423,000 units delivered in the first quarter of 2023. That’s growth of about 8%, not nearly as brisk as the growth of past quarters, but growth nonetheless.

The FactSet number is too high. That’s the problem. Not all analysts update numbers at the same rate. The company-compiled consensus number is about 443,000 units. That figure is an average of more than two dozen analysts from large brokerage firms that Tesla distributes each quarter.

The Tesla-provided number implies slower growth, but it might be too high too. The most current handful of estimates, updated in the past couple of weeks, that Barron’s reviewed average about 425,000 units — barely above the 423,000 number for the first quarter of 2023. The lowest estimates fall between 405,000 and 410,000 units.

Whatever the source of the estimate, delivery numbers have all been coming down by 30,000 to 50,000 units throughout the quarter with analysts citing a mix of slowing demand and production problems. Tesla has had difficulty ramping up production of its refreshed Model 3 at Tesla’s Fremont, Calif., plant.

With the stock dropping about 30% in the first quarter, investors are bracing for the worst. They will be relieved with a delivery number north of 420,000 units, says Wedbush analyst Dan Ives. His estimate for the first quarter is 425,000 units.

If Tesla doesn’t grow deliveries year over year, it will be the first time that has happened since the second quarter of 2020. That dip was due to the COVID-19 pandemic. Excluding that quarter, Tesla’s quarterly unit sales have never fallen year over year.

Tesla stock dropped 1.1% in Monday trading, closing just under $174 a share. The S&P 500 fell 0.3%. The Nasdaq Composite was flat.

Tesla’s earnings estimates have fallen along with delivery estimates. Today, Wall Street expects Tesla to earn about $2.90 a share in 2024. A few months ago that estimate was closer to $3.90 a share. At the start of 2023, the 2024 estimate was north of $7 a share.

Tesla earnings estimates have come down dramatically as the company cut prices for its EVs to help fend off rising competition and slowing demand growth.

Write to Al Root at allen.root@dowjones.com

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