Tesla cars are delivered to a showroom in Brooklyn on April 25, 2019 in New York City.
Spencer Platt | Getty Images
Citigroup thinks Tesla investors hoping for a post-earnings rally later this week should scrutinize one key financial metric when it reports its quarterly results this Wednesday.
The electric car maker’s automotive gross margin specifically will likely determine how Tesla’s stock finishes the week and remains central to the company’s future financial health, analyst Itay Michaeli told clients in a note.
Gross margins in the range of 21% to 23% will serve as a decent benchmark for expectations as “anything materially lower would support the bear case on Tesla’s profitability, and anything materially higher would support the bull case,” the analyst wrote.
“Tesla has targeted gross margin improvements throughout this year, so we’ll be watching for progress there,” Michaeli continued. “We’ll also be watching Tesla’s opex & capex as measures of earnings quality,” as well as…