Tesla earnings: Buy, sell or hold?
Tesla, the world’s most valuable car company, has had a rocky 2022 yet remains one of the most appealing stocks on the market.
Tesla CEO Elon Musk hasn’t done his brand any favours with his controversial purchase of Twitter and, worse, kicks off 2023 with a major court case in the USA surrounding a dodgy deal.
The company however remains a sought-after asset and its share price has risen more than 30% in January 2023. With its Q4 earnings set to be released later in January, CMTrading finds out whether the stock is a BUY, SELL or HOLD.
What’s more, check out our incredible trading offer for new clients at the end of this article.
Tesla earnings
Tesla (TSLA) Q4 Earnings – What to expect
Earnings Per Share (EPS) forecast – $1.15
Revenue forecast – $24.68 billion vs $21.45bn reached in Q3
Total market cap – $453.93bn
Tesla suffered a rocky 2022 in terms of performance. This was based on many factors including Musk’s brand-damaging rantings on Twitter. One of the primary reasons was the economic situation affecting China and the USA.
In 2023, Tesla’s stock is up 32% signaling a bullish call on the brand, a rarity in recent months on Wall Street and contradicting the many red flags affecting the carmaker’s performance.
Tesla predicted delivery growth of 50% in 2022 yet at 39% for 2022, badly missing its target. In 2023, the company announced price cuts for most of its models; the Model 3 base version is discounted by $3,000 to $43,990.
The discounts follow recent price reductions in China, Japan, and South Korea as the company hopes to garner more sales and fend off growing competitive threats.
Tesla – What do the experts think?
Alon Roslyakov, CMTrading South Africa Office Manager, shares advice for anyone wanting to trade Tesla shares.
What should traders expect?
Tesla faces several challenges that could impact its future growth and stock performance.
One major challenge is competition in the electric vehicle market. While Tesla is currently the leader in the electric vehicle market, other major automakers such as General Motors, Volkswagen, and Ford are investing heavily in electric vehicles and are likely to increase competition in the coming years. Additionally, new entrants such as Chinese electric vehicle companies are also entering the market and could pose a threat to Tesla’s market share.
Another challenge is the company’s ability to meet its production and delivery targets. Tesla has struggled with production issues in the past, and any delays in the production or delivery of its vehicles could negatively impact the company’s financial performance and stock price.
Tesla also faces challenges in its solar panel and energy storage businesses. These businesses are relatively new to the company and are still in the early stages of development. As such, it’s uncertain whether these businesses will be able to generate significant revenue and profits for Tesla in the future.
Driving growth
Despite the challenges that Tesla faces, several opportunities could drive the company’s growth and make it a compelling investment opportunity.
One major opportunity is the growth of the electric vehicle market. The demand for electric vehicles is expected to increase in the coming years as governments around the world implement policies to promote the adoption of clean energy. As the leader in the electric vehicle market, Tesla is well positioned to benefit from this growth.
Another opportunity is the potential for growth in Tesla’s solar panel and energy storage businesses. These businesses are still in the early stages of development and have the potential to become significant sources of revenue and profits for the company in the future.
Green-energy revolution
Finally, Tesla’s goal of becoming a full-fledged clean energy company presents a significant opportunity for growth. As governments around the world focus on reducing carbon emissions and transitioning to clean energy, there is potential for the company to expand its offerings and capture a larger share of the clean energy market.
Tesla stock – Technical Analysis
Technically we first look at the daily charting of TSLA. We can see clearly that since 2022 the stock has lost 67 % of its value since its highs early in the year. Right now, the stock is looking to make a bounce back but currently, it finds itself held within a price range between $105 and $150. POC (Point of Control) currently is at $ 123. On a macro level, we are looking for a break of the upper resistance of the range to look for long-term buying potential. Be wary however of further resistance coming up at $180 and $200. If we see a break of $150 with relative volume, then we would look for $180 and finally $200 as targets.
On the downside, however, support levels of $105 and naturally $100 are the biggest obstacles. A break of those support levels sees strong downside potential for the stock down to the first support of about $50. Given the high volatility of the stock due to its CEO Elon Musk’s public influence and general public affinity with the company, short traders would be wary of getting stuck short in a stock that has already seen 67% of its value lost. Investors and speculators would see the $100 price tag as a compelling opportunity to enter into this stock.
On the hourly, we see the downward trend line with prices bouncing off of the $100 mark and rejecting the $200 level. A clear break of the downward algo line could see huge potential to the upside. Additionally, a break of the 200 SMA with good volumes, would provide more confidence to the Bulls for a resurgence to the upside. The upward micro trend line can be considered a short-term support line for the move.
Currently, TSLA holds a Buy rating per consensus analyst ratings according to CNBC:
Conclusion
Traders should be careful entering trades in companies surrounding its earnings announcements. These are by far the most volatile points over the lifecycle of a stock. Keeping an eye on price movements and not acting hasty in fear of missing a trade is imperative. Sometimes even with the released data being positive from a fundamental standpoint, intricacies hidden within earnings reports can have more of a defining implication than the numbers themselves.
More company earnings are on the way
The first earnings season of 2023 is in full swing and many of the world’s biggest companies will report their results, creating major trading opportunities.
Top stocks earnings releases: EPS, Revenue forecast, and market cap
Wednesday, January 25, 2023
Tesla (TSLA) $1.16/ $25.16B / $386.51B
Tuesday, January 31, 2023
Pfizer (PFE) $1.07 / $24.37B / $268.6B
Wednesday, February 1, 2023
Meta Platforms (META) $2.26 / $31.48B / $359.19B
Thursday, February 2, 2023
Apple (AAPL) $1.98 / $123.39B / $2.13T
Alphabet A (GOOGL) $1.18 / $76.64B / 1.2T
Amazon.com (AMZN) $0.1888 / $145.78B / $1.00T
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