Looking Ahead to Tesla’s Earnings Next Week
Next week marks the most exciting day of each quarter for investors: the quarterly earnings report from Tesla (NASDAQ: TSLA). Since its first-quarter earnings back in April, Tesla’s stock has been on an incredible rally. Shares are up more than 160% so far in 2023 as the company works its way back toward the $1 trillion market cap club. So what are we expecting from Tesla’s earnings next week?
Back in April, Tesla’s revenue and earnings were in-line with analyst estimates. It wasn’t a major beat, but it was a solid showing for the company. Investors focused on the 20% year-over-year drop in net income, something that the company has battled with rising costs and decreasing margins. Much of it is self-inflicted, with Tesla choosing to lower prices in major markets around the world as a way of increasing sales volume. Shares of TSLA dropped by more than 4.0% following its report in April.
Looking ahead to Tesla’s earnings next week and it’s easy to see that the sentiment around the stock remains bullish. A lot of it has come from the adoption of its Supercharger network in North America by the likes of General Motors (NYSE: GM), Ford (NYSE: F), Rivian (NASDAQ: RIVN), and Mercedes Benz, just to name a few. While this is great news for the future, it doesn’t really impact Tesla’s financials now. Those expecting a massive beat from this news are likely to be disappointed, at least for this quarter.
Tesla Stock Prediction: Can TSLA Keep Rising?
Tesla’s insane returns so far this year pale in comparison to the likes of NVIDIA (NASDAQ: NVDA). Until NVIDIA’s rise is halted, it is likely that the direction of big tech stocks will continue going higher. As I’ve talked about in the past, Tesla’s stock is kind of a market of its own. No other stock comes close to Tesla when it comes to day trading or options volume. Because of this, you can always look at playing bullish or bearish options spreads depending on how you feel about the stock.
Technically speaking, the stock is coming up to a number of resistance levels, including its 52-week high price of $314. It recently broke through a major trendline that has acted as resistance since November 2021, which means the party could just be getting started for Tesla bulls. Of course, be wary of breakouts and re-tests. The key confirmation that Tesla is ready to take off is if it re-visits that trendline and uses it as a new level of support.
So how do we play Tesla’s earnings? Most analysts believe Tesla’s earnings will come in higher than expected. In general this quarter, companies are likely to beat as the consensus expectations are a 7% decline year-over-year for S&P 500 members. This does add more bullish sentiment to Tesla’s chart and we definitely could re-test the 52-week high price in the coming weeks. Long-term if you are a Tesla bull you’re likely looking at any discount to buy the stock. Selling cash-secured puts could be a way to lock-in a fair price for shares while collecting premium ahead of earnings.
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