Tesla Pre-earnings Analysis
Analysis done on hourly timeframe. Tesla is set to release their highly anticipated earnings report later this month, and investors are hoping it will help boost the stock back up from their recent sell-off. The company’s latest product reveal introduced new technologies that are set to transform Tesla’s future, but shares slid following the event with no warrant.
Now, Tesla is trading near the same level as it was a year ago, which has investors nervous coming into this report. While markets are consistently making new all time highs, Tesla is a big laggard and they’ll need to impress on earnings to avoid a further sell-off. Last earnings, Tesla’s EPS came in at .42 vs the .46 expectations, which sent shares lower following the report. Their goal this time around is to .46 once again, and they can’t afford another miss on the number.
Tesla’s revenue is expected to grow compared to the same period last year, but earnings per shares are once again expected to decline. This has been the case for them for the first two quarters so far this year, which explains why the stock hasn’t really gone anywhere. All year long it has been fighting for a trend, but its mixed earnings has kept them still.
The bad news of an earnings decline is already expected and may already be priced in, so any good surprise will send their shares higher; however if they miss the already lowered forecasts, then it could have a severe impact on their price point.
Options chain analysis:
Tesla’ option chain expiring on November 15th currently reflects an implied volatility reading of 58%, which translates to about a (+/-) $29 move from the underlying stock. The direction of that move depends on the earnings outcome.