Will Tesla Beat or Miss on Q4 Earnings? ETFs in Focus (2024)

Electric carmaker Tesla Motors (TSLA - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 24 after market close.

Tesla has been struggling since the start of 2024 on price cuts of its electric vehicles in China and Europe as well as supply chain delays due to a crisis in the Red Sea. The stock has plunged about 12% in the initial weeks of 2024, erasing $91 billion in market capitalization, according to data from Refinitiv.

With this slide, Tesla is just up 1.5% in the past three months. However, Tesla has the potential to stage a comeback if it beats estimates in the to-be-reported quarter (see: all the Alternative Energy ETFs here).

ETFs having a substantial allocation to this luxury carmaker like Direxion Daily TSLA Bull 1.5X Shares (TSLL - Free Report) , MeetKevin Pricing Power ETF (PP - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) and Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) are in focus ahead of its fourth-quarter earnings.

Tesla has an Earnings ESP of -1.04% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The electric carmaker saw positive earnings estimate revision of a penny over the past 30 days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The Zacks Consensus Estimate for the fourth quarter indicates a substantial year-over-year earnings decline of 37.8% and revenue growth of 6.9%. The earnings track record of the company is robust. It delivered a four-quarter average earnings surprise of 3.22%.

Tesla has a solid Growth Score of B but falls under a bottom-ranked Zacks industry (bottom 31%).

Tesla currently has an average brokerage recommendation (ABR) of 2.63 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 28 brokerage firms. The current ABR compares to an ABR of 2.61 a month ago based on 27 recommendations.

Of the 28 recommendations deriving the current ABR, eight are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 28.57% and 7.14% of all recommendations. A month ago, Strong Buy made up 29.63%, while Buy represented 7.41%.

Based on short-term price targets offered by 24 analysts, the average price target for Tesla comes to $242.38. The forecasts range from a low of $85.00 to a high of $380.00.

Earlier this month, Tesla reported record deliveries for the fourth quarter and exceeded analysts’ estimates. The electric carmaker also met its full-year delivery target. This reflects a continuation of Tesla's strong growth trajectory in the electric vehicle market.

The leading electric carmaker delivered a record 484,507 (461,538 Model 3 and Y and 22,969 Model S and X) cars worldwide in the fourth quarter, beating Street estimates of 483,173. The electric carmaker produced a record 494,989 (476,777 Model 3 and Y, and 18,212 Model S and X) vehicles during the quarter (read: ETFs to Ride on Tesla's Record Q4 Delivery Numbers).

Tesla's achievement is notable, particularly given the challenges faced by the automotive industry, including high interest rates and increasing competition in the EV space.

Direxion Daily TSLA Bull 1.5X Shares (TSLL)

With AUM of $827.6 million, Direxion Daily TSLA Bull 1.5X Shares is by far the largest U.S.-listed single-stock ETF on the market today. It offers 1.5 times (150%) the daily percentage change of the common stock of Tesla, charging 95 bps in annual fees. TSLL trades in an average daily volume of 14 million shares (read: 5 Best-Performing Single-Stock ETFs of 2023).

MeetKevin Pricing Power ETF (PP - Free Report)

MeetKevin Pricing Power ETF is an actively managed ETF that seeks to achieve its investment objective by investing primarily in U.S.-listed equity securities of Innovative Companies, which, in Kevin’s view, have more “pricing power” than their peers. The fund holds a small basket of 16 stocks, with Tesla occupying the top position at 21.9%.

MeetKevin Pricing Power ETF has accumulated $38.4 million in its asset base. It charges 77 bps in annual fees and trades in a lower volume of 13,000 shares a day on average.

Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)

Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. Holding 53 securities in its basket, Tesla takes the second spot with 15.7% of the assets.

Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $18.3 billion and an average daily volume of around 5 million shares. It charges 10 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: 5 ETF Tactics for Your Portfolio in 2024).

Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report)

Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology. It employs a call option overlay to seek boosts in performance during extreme moves up in Tesla while holding a tech index for diversification and put options as a hedge.

Simplify Volt Robocar Disruption and Tech ETF charges investors 0.95% in annual fees. It has accumulated $3.8 million in its asset base while trading in an average daily volume of 2,000 shares.

Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)

Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 292 stocks in its basket. Of these, TSLA takes the second spot with a 13.6% share. Broadline Retail, Hotels, Restaurants & Leisure and Specialty Retail make up the top three sector holdings.

Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.3 billion in its asset base while trading in a good volume of around 105,000 shares a day on average. Fidelity MSCI Consumer Discretionary Index ETF charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.