Pressure is mounting on Elon Musk to turn the wheel of his embattled electric vehicle company when it reports first-quarter earnings, according to Barclays. "Tesla's deeply challenged near-term fundamentals are taking the backseat to a much larger issue, as Tesla is facing an investment thesis pivot," wrote analyst Dan Levy in a note to clients on Wednesday, saying that investors should brace for the earnings call to be a negative catalyst for shares.
Levy expects Austin, Texas-based Tesla to miss Wall Street expectations and report gross profit margins below consensus estimates in reporting results next week. Free cash flow may also come in negative for the first time since the first quarter of 2020, with Levy noting that commentary will do little to steer investors away from the view that "near-term fundamentals remain weak.