Josh Gilbert, market analyst at eToro, shares his three things to watch in Australia in the coming days.
Tesla (NASDAQ:TSLA) earnings
In the lead-up to this week’s earnings call, Tesla’s highly-anticipated Robotaxi event failed to deliver.
Elon Musk’s keynote did not provide the expected level of detail on timelines and lacked insight into other Tesla projects, leaving investors underwhelmed. This ultimately created a ‘buy the rumour, sell the news’ type of event, sending shares lower.
In Q2, Tesla missed earnings estimates for the fourth quarter in a row, extending its tumultuous 2024. Although other key metrics missed estimates, revenue did jump above expectations to $25.5 billion.
While the start of Q2 saw a better-than-expected delivery result, one of the biggest disappointments was the view of ‘notably lower’ vehicle sales in 2024. This disappointment has extended into Q3.
Despite the company consistently missing earnings estimates and under-delivering on its Robotaxi event, Tesla remained the most held stock on the eToro platform in Australia in Q3, a position it has held for years.
Looking towards this week’s results, some Musk magic may be needed on the earnings call to reassure investors after a tumultuous year.
While the Q2 earnings call was subdued, Q3’s call will need to see Musk step up and offer more insights into what’s next for investors.
Ongoing rate cuts from the Fed should be a win for Musk and Tesla, which could signal a pickup in EV demand from here.
However, another underwhelming performance by Musk on this call may necessitate some reflection on how the EV manufacturer communicates with investors and customers going forward.
Markets have made it clear they want tangible product timelines, not flashy futurism, and the far-off promise of Tesla’s Optimus bots is less appealing than knowing what will be road-ready in the next 12 months.
ResMed earnings
ResMed is by far the leader in the sleep apnoea space, with minimal competition. That’s why shares have taken off in the last year, up over 60%, as sales continue to grow and the business gains further market share.
This week, they’ll hand down their fiscal Q1 2025 earnings with the market expecting earnings of US$2.07 a share on revenue of US$1.18 billion.
The biggest challenge for the business over the last 18 months has been the emergence of GLP-1 drugs like Ozempic. Originally designed to treat diabetes, these drugs have also shown potential for appetite suppression and weight loss.
This development has impacted ResMed due to the connection between obesity and sleep apnea, potentially reducing the demand for its devices. However, that impact was overstated and ResMed’s sales have only grown in that time.
Growing margins are just one reason investors like this business. This time last year its gross margin was at 56% and thanks to cost improvements and operational efficiencies, that’s expected to reach 58.9% this quarter. Its SaaS business is also a key contributor to top-line growth.
With fears diminishing from GLP-1 drugs and awareness of sleep apnea growing, ResMed looks to have a lot of momentum, especially with its addressable market alongside its market dominance.
However, these earnings will give us a better insight into whether we’ll keep seeing growth – but any stumble could leave investors feeling restless.
Qantas AGM
Last year’s fiery AGM (occurring around former CEO Alan Joyce’s divisive departure) was a tense affair, with investors hungry for consequences while the business’ reputation swung from controversy to controversy.
This time around, Qantas’ meeting is set to be much less eventful. It may still be far from seamless though, given that today, the carrier will learn the true compensation costs of its pandemic layoffs that were deemed unlawful by the Federal Court.
In the last year, ‘the flag carrier of Australia’ has undergone significant management changes – most notably with new CEO Vanessa Hudson, new chairman John Mullen and new Frequent Flyer head Andrew Glance.
Broadly, the increased effort under Hudson to rebuild Qantas’ tarnished public perception through improved customer initiatives dragged down its bottom line over the last year (as seen in its FY24 results), but the perception that the business is serious about restoring public trust has worked wonders for its share price, climbing by a monumental 51.94% in the past year.
At last year’s meeting, we seemed very close to a leadership spill, with key members of the airline’s board (notably, marketing mastermind and TV personality Todd Sampson) coming close to the chopping block. This year, the executive remuneration report looks slightly more modest and proxy advisory firms have gone much softer on calls to upend the board and leadership.
Qantas’ revenue and net income are down, so nothing can be ruled out. However, Hudson’s painstaking effort to reconnect with customers seems clear and earnest. For now, it seems that Qantas’ investors understand the airline is back on track and heading towards renewed success in this financial year.