Tesla is scheduled to release earnings after Wednesday’s close. The stock hit a record high of $414.50/share in 2021 and is currently trading near $215. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:
Earnings Preview
The company is expected to report a gain of $0.58/share on $25.55 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $0.65/share. The Whisper number is the Street’s unofficial view on earnings.
A Closer Look At The Fundamentals
The company has seen up and down earnings over the last few years. In 2020, the company made $0.75/share. In 2021, earnings jumped to $2.26. Then, earnings grew again to $4.07 in 2022. Then, earnings fell to $3.12 in 2023. This year, earnings are expected to fall to $2.25 and then grow to $3.16 in 2025. The stock sports a price to earnings (P/E) ratio of 93 which is roughly four times higher than the benchmark S&P 500.
A Closer Look At The Technicals
Technically, the stock has been lagging other growth stocks and the benchmark S&P 500 this year. The stock is currently -20% below its 52-week high and is trading below its 50 DMA line. Furthermore, the stock is down 12% in 2024 while the S&P 500 is up over 20% year to date. The bulls want to see the stock gap up after reporting earnings and the bears want to see it gap down.
True Market Leader = Remarkable Stock
Tesla is considered a true market leader and is one of the strongest winners in the history of the US stock market. Tesla went public on June 29, 2010, with an initial public offering (IPO) price of $17 per share, raising over $226 million. Since its IPO, Tesla’s stock has experienced significant fluctuations and significant growth. It is currently in one of its long down periods but the stock has managed to breakout of these long trading ranges and race higher.
Early Years (2010-2012)
After the IPO, Tesla’s stock price remained relatively flat for the first few years. The company was primarily focused on surviving financially and preparing to launch its first built-from-scratch electric vehicle, the Model S sedan, which debuted in 2012.
Growth Phase (2013-2019)
From 2013 onwards, Tesla’s stock began to rise as the company expanded its product line and increased production capacity. Key milestones during this period included the introduction of the Model X, Model Y, and the Model 3, which helped Tesla dominate the EV market globally.
Recent Performance (2020-2024)
Tesla’s stock saw a dramatic increase in value during the COVID-19 pandemic, driven by strong sales growth, increased production, and investor enthusiasm for electric vehicles. The stock had a big run and topped out in 2021 at $414.50/share. Then it fell down to $101.81 in early 2023. After it hit that bottom it has been rallying since and is currently trading near $215/share.
Company Profile
Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally.
The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits; and non-warranty after-sales vehicle, used vehicles, body shop and parts, supercharging, retail merchandise, and vehicle insurance services.
This segment also provides sedans and sport utility vehicles through direct and used vehicle sales, a network of Tesla Superchargers, and in-app upgrades; purchase financing and leasing services; services for electric vehicles through its company-owned service locations and Tesla mobile service technicians; and vehicle limited warranties and extended service plans.
The Energy Generation and Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation and energy storage products, and related services to residential, commercial, and industrial customers and utilities through its website, stores, and galleries, as well as through a network of channel partners; and provision of service and repairs to its energy product customers, including under warranty, as well as various financing options to its solar customers.
The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was incorporated in 2003 and is headquartered in Austin, Texas.
Pay Attention To How The Stock Reacts To The News
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
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