As Tesla Motors gears up to announce its second-quarter 2024 results on July 23 after markets close, investors are on tenterhooks. The electric carmaker’s stock has been a shooting star, rocketing up by 65.3% in the past three months, handily outpacing the industry’s growth which stands at 47.3%. A meteoric surge of 20.9% this month alone has firmly set Tesla back on the map by wiping out most of its earlier losses this year. The rumbling anticipation is palpable, with investors eyeing a potential earnings beat that could further stoke the flames of Tesla’s rally.
Pinpoint accuracy in earnings estimates, whisperings of a price surge, and a Zacks Rank #3 (Hold) have set the stage for a nail-biting theater. Tesla’s quarterly earnings whisper a tale of a -4.13% Earnings ESP and subtle positive revisions in estimates. The big reveal promises a 31.9% year-over-year slump in earnings, yet a whisper of growth at 0.8% in revenues paints an intricate mosaic of Tesla’s financial tapestry. History seems set to repeat as Tesla has a poor track record of meeting the projections, delivering an average negative earnings surprise of 1.55% over the past four quarters.
Revving Up: Q2 Deliveries and Market Sentiment
Earlier this month, Tesla dropped a bombshell by unveiling robust vehicle delivery figures, signaling a beckoning dawn in demand that could alleviate concerns surrounding the flagship Model 3/Y inventory glut. Shipping out 443,956 vehicles globally in the second quarter – comprising 422,405 Model 3/Y and 21,551 others – Tesla showcased its prowess amidst the EV market cacophony. Although the figures reflected a 4.8% dip from the same period last year, they still eclipsed the analysts’ prediction of 436,000. With competition heating up in the e-vehicle arena, the slower pace of sales has put a premium on profitability per unit, accentuating the need for each Tesla sold to rake in higher gains than before.
Fanning the Flames: Analysts and Their Tuned-Up Predictions
A symphony of analysts has raised the bull’s eye on Tesla post the delivery data extravaganza, hinting at a potential resurgence in the company’s fortunes. The spotlight gleams on a few noteworthy Tesla ETFs that have courted significant investments:
Direxion Daily TSLA Bull 1.5X Shares (TSLL)
Driving with a hefty AUM of $2 billion, Direxion Daily TSLA Bull 1.5X Shares emerges as the single-stock ETF champion in the U.S. market. With Tesla in its crosshairs, TSLL revs up at 1.5 times (150%) the daily percentage change of Tesla’s common stock, lighting up the investment track with an annual fee of 86 bps and an average trading volume of 40 million shares.
MeetKevin Pricing Power ETF (PP)
MeetKevin Pricing Power ETF, an actively managed fund, sets its sights on U.S.-listed equity securities of Innovative Companies deemed to wield more “pricing power” than peers. A compact enclave of 22 stocks, with Tesla occupying a robust 15.5% stake, this $47.4 million asset base charges 77 bps annually and trades at a quieter volume of 20,000 shares per day on average.
Consumer Discretionary Select Sector SPDR Fund (XLY)
The Consumer Discretionary Select Sector SPDR Fund negotiates exposure to the expansive consumer discretionary domain by mirroring the Consumer Discretionary Select Sector Index. Featuring 52 securities in its arsenal, Tesla holds a silver medal position with 18.2% of the assets. With assets under management of $20.4 billion and an everyday trading spree of around 3 million shares, this fund charges a modest 9bps annually and flaunts a Zacks ETF Rank #3 with a Medium risk profile.
Simplify Volt Robocar Disruption and Tech ETF (VCAR)
Racing towards disruptive autonomy, Simplify Volt Robocar Disruption and Tech ETF orchestrates a focused exposure to the vanguard of autonomous driving technology. Amping up its performance with a call option overlay, this $5.8 million asset portfolio gambles on Tesla’s meteoric rise, bundling a tech index for diversification and a hedge through put options. Investors pay a 0.95% annual entrance fee to ride this racy tide, trading at a rhythm of 2,000 shares daily on average.
ARK Innovation ETF (ARKK)
The ARK Innovation ETF takes a plunge into the realm of avant-garde products, epic technological advancements, and scientific discoveries spanning DNA Technologies, Automation, Robotics, Energy Storage, Artificial Intelligence, and Fintech Innovation. With 33 securities in its treasure chest and Tesla reigning atop at 14.5%, ARK Innovation ETF is at the very cusp of innovation.
Exploring Exchange-Traded Funds (ETFs)
An Exchange-Traded Fund (ETF) boasting a robust $6.7 billion in its asset base has been charging investors a modest 75 basis points in fees per year. This ETF demonstrates liquidity prowess, engaging in an impressive average daily volume of 8 million shares. Despite facing market fluctuations and growing competition, this ETF has managed to weather storms and emerge as a stalwart contender in the ever-evolving financial landscape.
The Resilience of ETFs
ETFs, a popular investment vehicle, have long been favored by investors for their diverse offerings and ease of trading on stock exchanges. As market conditions fluctuate, these funds have remained resilient, providing stability and growth opportunities for astute investors. The $6.7 billion asset base of the aforementioned ETF symbolizes the confidence investors have in this financial instrument.
Affordable Investment Options
With a fee structure of 75 basis points per year, this ETF offers investors an affordable way to access a diversified portfolio. This cost-effective approach has been a major draw for investors looking to optimize their returns while keeping expenses in check. The attractiveness of this fee structure has undoubtedly contributed to the success and popularity of this particular ETF.
Liquidity and Trading Volume
Trading an average of 8 million shares per day showcases the liquidity and demand for this ETF in the market. High trading volumes indicate active investor interest and confidence in the performance of the fund. The ability to trade in and out of positions smoothly is a key feature that appeals to many investors seeking flexibility and efficiency in their investment strategies.
Looking Ahead
As the financial landscape continues to evolve and adapt to changing market conditions, ETFs are likely to maintain their relevance and popularity among investors. The impressive track record of this particular ETF, with its substantial asset base, reasonable fees, and robust trading volume, positions it as a strong contender for investors seeking stability and growth in their portfolios.
