Analyst: Tesla known to overpromise, underdeliver

The U.S. auto industry has been on a tear lately, as a steadily improving economy and stable job environment have given consumers the confidence they need to make large-ticket purchases once again. Just Tuesday, vehicle sales came in at a record high for April, at an annual rate of 17.4 million, largely driven by truck and SUV sales, which have been helped along by lower prices at the pump. In fact, the S&P 500 automobile industry is one of the big winners in the consumer discretionary space this earnings season, poised to grow profits by 39.8 percent year over year. Great results have already come out from General Motors (GM) and Ford (F), next up is Tesla (TSLA).

Read more from Estimize:
Can Oprah Save Weight Watchers This Quarter?
Can Tesla Continue to Lose Money?
Is Zynga in Trouble This Quarter?

While Tesla is in the automobiles space, it tends to act differently than its peers because of its offering and where it is in the business cycle. Because the company manufactures electric cars, gasoline prices have very little impact on sales. Even the lower gas price environment didn't drive sales away from Tesla to traditional auto manufacturers, as their customer is after the cache and prestige that comes with owning one of the cult favorite vehicles. Adding to those differences is the fact that Tesla is in the midst of a high investment cycle unlike the other names, which has led to a decrease in the bottom line for the last seven quarters.

For the first quarter, the Estimize community is calling for EPS of -55 cents, 1 cent worse than what Wall Street is expecting, while revenue estimates of $1.60 billion are just slightly above the sell-side's $1.59 billion. The crowd has been bearish on Tesla's profitability lately, moving EPS estimates down 314 percent since the Q4 report, now expecting earnings to decline 38 percent on a year-over-year basis. Of the companies reporting this week, Tesla is only behind GoPro (GPRO) and Yelp (YELP) for having the steepest downward revisions. Revenue estimates have also been ratcheted down by 6 percent, but are expected to grow 46 percent from the year-ago period. On average, Tesla has only beaten the crowdsourced EPS consensus 31 percent of the time, but the stock moves up 8 percent on average in the 30-day post-report period.

Unlike many other U.S. corporations that tend to sandbag forward-looking guidance, Tesla is notorious for overpromising and underdelivering. Last year the carmaker delivered a record 50,000 vehicles but failed to meet volume expectations of 55,000 the company had set earlier in the year. Tesla guided for 80,000-90,000 deliveries of its Model X and Model S in 2016. The mass-market Model 3, which is scheduled to go on sale in 2017 for under $35,000 already has 400,000 preorders. While that sounds like great news, there is growing concern around whether or not the automaker will be able to deliver. The company is still aiming to scale production up to 500,000 vehicles per year by 2020, and is now on the hook to deliver 400,000 of one model, with production starting next year. Not only does the Model 3 come with lower margins, but adding a third model to it's lineup is sure to keep Tesla's profits in the red for the foreseeable future.

Investors will also be interested in hearing about how much money it will take to make all of these projects happen. Operating expenses currently account for almost 50 percent of the company's revenue. Tesla has already made large investments in launching its first SUV and building out a sustainable battery. As production ramps up for each of these models, energy credits from green technology are expected to shrink proportionally to sales growth.

How do you think TSLA is going to perform Wednesday afternoon? Get your estimate in here!