ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Disruptive Technology Channel
  2. Tesla’s Outlook Remains Compelling
Disruptive Technology Channel
Share

Tesla's Outlook Remains Compelling

Tom LydonApr 22, 2022
2022-04-22

As growth stocks continue slumping, an obvious standout is Elon Musk’s Tesla (NASDAQ:TSLA). The electric vehicle giant reported solid first-quarter results earlier this week, including a 23% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) on a quarter-over-quarter basis.

Moreover, Tesla is proving that it has pricing power and the ability to reduce production traits, which is enviable in an inflationary environment.

“While our vehicle sales outlook is largely unchanged, we have decreased our near-term overhead expense assumption as Tesla’s ability to scale occurred faster than we had expected,” says Morningstar analyst Seth Goldstein.

Potentially bolstering the case for Tesla are the company’s improving margins — an essential element in the electric vehicle production process.

“Tesla reported automotive gross margin excluding regulatory credit sales of 30% during the quarter, the first quarter in the company’s history to achieve at least 30%,” adds Morningstar’s Goldstein. “This highlights our long-term thesis that Tesla will be able to continue expanding profit margins due to manufacturing efficiencies. However, we expect it will take some time for the company to achieve our long-term automotive gross profit forecast of nearly 38%.”

The research firm boosted its fair value estimate on Tesla while maintaining a narrow moat rating on Musk’s company. Narrow moat implies that a company has some competitive advantages over rivals, but not enough for the wide moat designation.

Of course, Tesla’s share price performance is meaningful to scores of exchange traded fund investors. Some 260 ETFs combine to hold nearly 97 million shares of the electric vehicle maker, according to ETF Research Center data.

Nine of those funds feature double-digit allocations to Tesla stock with the largest weights — which are at 15% and above — found among cap-weighted consumer discretionary funds.

Three of the 15 biggest ETF holders of Tesla stock are the following ARK Invest exchange traded funds: the ARK Innovation Fund (ARKK B+), the ARK Autonomous Technology & Robotics ETF (ARKQ B), and the ARK Web x.0 ETF (ARKW C+). Those funds could be worth watching as Tesla ramps up production at new facilities outside the U.S.

“The Berlin factory opened in the last week of March, and the Austin factory did not open until April. Further, we think coronavirus-related shutdowns at the Shanghai factory will likely weigh on second-quarter profits. However, we view all of these as temporary issues that should not affect the company’s long-term profitability,” concludes Goldstein.

For more news, information, and strategy, visit our Disruptive Technology Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X