Tesla Reports Earnings Next Week: What to Expect
Tesla (NASDAQ: TSLA) investors haven’t been having a great time as of late. Trust me, I know. The stock had an incredible rally earlier this year but has since fallen back to Earth and has traded mostly within a range over the past couple of months. Tesla’s news hasn’t been great, with a miss on deliveries and persistent inflation continuing to weigh on consumers. Investors are also eagerly awaiting news on a launch date for the much-anticipated Cybertruck, which many believe could be released later this year.
So what can we expect from the company’s third-quarter earnings? The stock has been suffering as of late and while that could indicate bearish sentiment, it could also mean that many investors are pricing in the quarterly results. The sentiment around this quarter’s earnings isn’t great following the miss on deliveries for the quarter. Again, shares of Tesla are down by more than 9.0% over the past month of trading. Any disappointment is likely to already be priced into the stock.
Does that mean Tesla’s stock won’t fall? Absolutely not. Any stock can continue to fall no matter what the circumstances. The market will treat the stock as the market wants. But if I were a betting man, I would think that the downside risk of Tesla’s stock isn’t as high heading into its earnings call.
Are There Bullish Tailwinds for Tesla?
There very well could be. The night is always the darkest before the dawn. As I mentioned any mention of a Cybertruck launch date could send this stock into orbit. It is one of the most anticipated releases in the auto industry in years and the Tesla cult is itching to get a glimpse of it. I can see Musk gauging the bearish sentiment and at least teasing a date later this year.
As unfortunate as it is, the ongoing conflict between Israel and Hamas could also benefit Tesla and other EV makers. The price of oil futures is surging as many believe the conflict could impact oil production in the Middle East. There are no winners when it comes to war, but there is always a psychological benefit for Tesla when oil prices are high and gas prices are even higher.
While inflation remains sticky, many believe the worst is over and numbers are declining in both the United States and China. These two represent the largest markets for Tesla’s vehicles and continued price slashing could mean we see a surge in demand into 2024.
Again, all of this is subjective. Musk might not mention Cybtertruck at all and the two sides could reach a ceasefire this weekend. Tesla is always a polarizing stock, there’s no doubt about that. Although I rarely listen to market sentiment, it seems like the stock is on shaky ground heading into this quarter’s earnings. Could it skyrocket from here into the end of the year? Of course! But I’m holding any shares I own and waiting until after the report to determine my next move.