Tesla Inc (Nasdaq: TSLA ) investors are hoping the company's second-quarter earnings report on Aug. 1 can get TSLA stock back on track after another difficult quarter. Unfortunately, Wall Street analysts see more hard times ahead for Tesla.
Analysts are expecting Tesla to report a second-quarter earnings per share loss of $2.81 on Wednesday after the company reported a record per-share loss of $4.19 in the first quarter. Analysts are also expecting second-quarter revenue of $3.97 billion, up 42.1 percent from a year ago.
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Beyond the headline numbers, investors will be watching for commentary on Model 3 production, Tesla's balance sheet and its latest profitability targets. Tesla finally hit its goal of producing 5,000 Model 3s in one week in the last week of June after six months of delays. The company's latest goals include producing 6,000 Model 3s per week by the end of August and reporting the company's first ever profitable and cash-flow positive quarter in the third quarter.
Goldman Sachs analyst David Tamberrino says Tesla investors should pay particular attention to any details on how Model 3 production is going so far in the third quarter and how well Tesla is converting its Model 3 reservations to actual vehicle orders. Tesla has said repeatedly that it will not need to raise capital in 2018, but Tamberrino estimates Tesla burned through another $600 million in the second quarter.
"For the year, we now estimate a $1.5 billion cash burn – and continue to forecast a capital raise in 4Q18," Tamberrino says.
Tamberrino estimates Tesla has only been producing about 4,000 Model 3s per week so far in the third quarter based on VIN registration data.
UBS analyst Colin Langan says gross margins in the second quarter will also be key. Langan is calling for gross margins of 19.6 percent, up from 18.8 percent in the first quarter.
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He is also expecting an EPS loss of $3 per share for the quarter and says investors should be skeptical of any discussions of profitability in the third quarter due to the company's recent decision to charge customers $2,500 each for vehicle configuration.
"We believe this will drive a profit in Q3 which will not be sustainable as prices normalize." Langan says.
Goldman Sachs and UBS both have "sell" ratings and $195 price targets for TSLA stock .
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