Tesla Pre-earnings Analysis
Tesla is set to report its fourth quarter earnings and its investors are nervous about the results. Despite the market rally, the stock has been selling off for weeks as competition wages and price cuts save investors. Tesla’s past quarter has also had recalls and disappointing cyber truck reviews. Supply chain issues due to uncertainty in the Red Sea has also recently impacted Tesla’s production, adding more pressure to the company. Tesla has missed expectations on two of its last four earnings, which explains why the stock is flat from about a year ago. Investors are already unhappy with its performance, so this earnings report could set the tone for 2024. Another missed earnings or unexpected hiccup may send the stock below 200.00. Analyst expectations are already low for this quarter, but investors may want to see Tesla come up at least 120-150% above expectations to buy it from this dip.
Option chain analysis:
Tesla’s option chain for expiration 01/26 is currently reflecting a 120% implied volatility reading, which translates to about a $16 move, which direction is uncertain. If Tesla doesn’t give the move, then both sides will be crushed.