Skip to Content
Stock Analyst Update

Tesla's First Quarter Is an All-Time Company Record

We are increasing our Tesla fair value estimate to $354 from the time value of money adjustment in our model.

Mentioned:

Tesla (TSLA) announced record quarterly results on April 26 with adjusted diluted EPS of $0.93 (Refinitiv consensus was $0.79) about four times larger year over year versus first-quarter 2020 and up 16.3% sequentially from fourth-quarter 2020. We are increasing our fair value estimate to $354 from the time value of money adjustment in our model. Revenue increased 74% year over year but fell 3.3% sequentially as combined Model S and Model X deliveries fell by 83% as the company transitions those vehicles to new generation models coming in second and third quarter, respectively. Total deliveries still were a record though thanks to 13.1% sequential growth in combined Model 3 and Model Y sales. We remain comfortable modeling total 2021 deliveries of 800,000 units as demand continues to be strong, the S and X should drive incremental growth later this year, and management talked about combating the semiconductor shortage by quickly finding new microcontrollers and developing new firmware for chips made by new suppliers. The call had no discussion of the shortage so it’s unclear if this mediation effort will last, but we sensed no apprehension from management on the call.

Free cash flow of $293 million fell significantly from fourth quarter’s $1.9 billion but was much better than the $895 million burn in first-quarter 2020. Compared with fourth quarter, working capital was essentially a nonfactor and capital expenditures rose 17% to $1.3 billion. Emission credit sales of $518 million grew 46% year over year and almost equaled pretax income of $533 million. Management maintained its high level guidance for 2021 deliveries in excess of the long-term goal of 50% annual growth and total capacity remains at 1.05 million units. Berlin and Texas plants remain due to open late this year which will increase this figure. We think the stock continues to trade on the chance Tesla becomes massively larger over time rather than on any single quarter’s results.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

David Whiston does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.