Tesla Stock Price Surges Again As App Downloads Point To Q3 Earnings Beat

From a massive 21% plunge in its stock price on Sept. 8 to an equally impressive rebound this week, Tesla investors are left wondering what's behind the stunning turnaround in fortunes for the electric vehicle maker. The answer might be Tesla app downloads.

Tesla posted a massive 13% comeback Monday and a 7.2% jump Tuesday on the heels of a research report pointing to a possible increase in electric vehicle sales. Released Monday, Goldman Sachs revealed it's now counting the number of downloads of Tesla's app to figure out how many EVs Tesla is actually selling. The news was apparently enough to encourage investors to buy.

Several sources called mobile app downloads an odd measure of productivity that hasn't been used before. On the other hand, Goldman Sachs contends counting app downloads might indicate more people are buying Tesla EVs.

“Tesla global weekly app downloads have recently been tracking up on a (year over year) basis, with the most recent full week of global data at up about 20%,” wrote Goldman Sachs analyst Mark Delaney. “Tesla app downloads are primarily concentrated in the United States and China, with the (year-over-year) growth being driven by China.”

Counting app downloads has led Goldman Sachs to conclude Tesla might beat its projected third quarter deliveries. Delaney said the app download data could point to Tesla exceeding Q3 delivery estimates of 145,000 EVs. Tesla delivered 97,000 EVs in 3Q 2019. Its goal for 2020 is to deliver 500,000 EVs, which right now seems farfetched.

China, the largest new-car market in the world and also the largest market for EVs, is Tesla's primary target for obvious reasons.Due to the impact of COVID-19 on China, estimates of Tesla EV deliveries in China bottomed-out at 118,000 vehicles in April, but recovered to 121,000 by the end of June.

Goldman Sachs' estimate that Tesla might blow past 145,000 remains a minority opinion among analysts, however. The consensus opinion is 121,000 EV deliveries by the end of Q3, Barron's noted.

Despite its higher delivery estimate, Goldman Sachs maintained its hold rating on Tesla’s stock, setting a price target of $295 per share. Tesla's stock price stood at $449.76 on Tuesday.