Electric carmaker Tesla Motors TSLA is set to unveil its second-quarter 2024 results on July 23 after the markets close.

Tesla’s stock has seen a remarkable upswing, surging 65.3% in the past three months, outpacing the industry’s growth of 47.3%. The recent month alone witnessed a staggering 20.9% surge in its share price, nearly eradicating the losses from the first half of the year. This positive trajectory is poised to continue should Tesla deliver an earnings beat. In fact, the company’s strong performance aligns with favorable earnings estimate revisions for the upcoming quarter, indicating potential for exceeding expectations.

ETFs heavily exposed to Tesla like Direxion Daily TSLA Bull 1.5X Shares (TSLL), MeetKevin Pricing Power ETF (PP), Consumer Discretionary Select Sector SPDR Fund (XLY), Simplify Volt Robocar Disruption and Tech ETF (VCAR), and ARK Innovation ETF (ARKK) are drawing attention ahead of Tesla’s Q2 earnings report.

Assessing Earnings Prospects

Tesla boasts an Earnings ESP of -4.13% and a Zacks Rank #3 (Hold). A positive Earnings ESP combined with a Zacks Rank of 1, 2, or 3 typically enhances the likelihood of an earnings beat. Recent earnings estimate revisions generating positive momentum before the report are a promising signal. However, the Zacks Consensus Estimate indicates an expected 31.9% decline in year-over-year earnings but a slight 0.8% revenue growth for the second quarter. Historically, Tesla has revealed a four-quarter average negative earnings surprise of 1.55%.

Q2 Delivery Highlights

Tesla delighted investors earlier this month with robust vehicle delivery numbers, signaling a rebound in demand and potentially mitigating concerns regarding excess inventory of its flagship Model 3/Y.

The company delivered 443,956 vehicles globally in Q2, comprising 422,405 Model 3/Y and 21,551 other models. While a 4.8% drop in deliveries from the previous year was noted, it exceeded analysts’ expectations of 436,000 units. This sales dip reflects the intensifying competition in the electric vehicle market, prompting a focus on ensuring profitability per vehicle sold. In Q2, Tesla manufactured 410,831 cars, including 386,576 Model 3/Y and 24,255 other models.

Analyzing the Market Buzz

Following the impressive delivery figures, several analysts raised their target prices for Tesla, suggesting a potential turn in the company’s fortunes.

Direxion Daily TSLA Bull 1.5X Shares (TSLL)

With an impressive AUM of $2 billion, TSLL stands as the largest US-listed single-stock ETF, offering 1.5 times the daily percentage change of Tesla’s common stock. The fund, charging 86 bps annually, records an average trading volume of 40 million shares per day.

MeetKevin Pricing Power ETF (PP)

The actively managed PP ETF seeks returns by investing in US-listed innovative companies with perceived superior pricing power compared to peers. With an asset base of $47.4 million, PP charges 77 bps annually and trades around 20,000 shares daily on average.

Consumer Discretionary Select Sector SPDR Fund (XLY)

XLY offers exposure to the broader consumer discretionary sector by tracking the Consumer Discretionary Select Sector Index. With Tesla as its second-largest holding at 18.2%, XLY manages an AUM of $20.4 billion with a daily trading volume of approximately 3 million shares.

Simplify Volt Robocar Disruption and Tech ETF (VCAR)

VCAR, an actively managed ETF, seeks concentrated exposure to autonomous driving technology. Employing call option overlays for performance enhancement during Tesla’s upswings, VCAR also includes a tech index for diversification and put options for hedging. The fund, charging 0.95% annually, manages $5.8 million in assets and trades about 2,000 shares per day.

ARK Innovation ETF (ARKK)

ARKK is an active fund investing in companies benefiting from technological advancements like DNA technologies and genomic revolutions. With Tesla as its top holding at 14.5%, the fund manages 33 securities and has garnered attention in innovation-driven sectors.