Tesla’s last earnings report was something special to behold. The company’s stock has been pretty tumultuous over the past six months or so, seeming to trend downwards just as often as it trends upwards, so is it possible Tesla will go up after earnings next?
The Bull Case For Tesla
As one of the largest U.S. companies and worth more than most major car manufacturers combined, it’s not hard to make a bullish case for Tesla: The company is hugely successful — even if it’s not always consistently profitable — and its main product, the electric car, only continues to grow more in-demand than ever before.
Elon Musk has shown that he holds the power to send the share price into peril whenever he happens to say something inflammatory that investors aren’t too happy with, but not even these instances hold a flame to the fact that Tesla stock has risen from under $50 a share at the end of July 2019 to over $650 at the end of July 2021.
A primary tailwind for a bullish thesis stems from government regulation. Around the world governments are mandating the end of gasoline cars by 2030 and 2035. The implications of this to Tesla are massive. As the pioneer in electric vehicle technology, Tesla stands to benefit more than most.
The tectonic shift from consistently negative to positive earnings has already taken place and revenue forecasts looks like a straight line up and to the right also.
Plus, Tesla is so much more than a car company. Solar is another string in its bow. Making money from the energy grid is another. And some argue its software is 5-10 years ahead of its competition.
As more and more shift away from traditional vehicles and embrace electric, Tesla should only grow stronger.
TSLA Earnings Estimates
At the close of Tesla’s most recent quarter in June of 2021, officially culminating with an earnings call on Monday, July 26th, the electric car manufacturer reported its best quarter in the company’s history: that’s more than a billion dollars in net income.
Still, thanks to some expert analysis and estimates that preceded the call and ultimately overestimated the company’s quarterly earnings, Tesla stock took a tumble in the wake of the earnings report. It’s interesting how the company managed to have its very best quarter on record, but still ended up seeing its shares fall in price as a result of the higher estimates that they failed to meet.
It’s a classic case of buy the rumor, sell the news; in other words, the good news had been baked in.
It will be interesting to see if Tesla can hit analyst’s earnings predictions for their next quarter ending in September of 2021, which has a high estimate of $11.46 billion and a high estimate of $15.21 billion for an average Q3 estimate of $12.73 billion.
TSLA Earnings Whisper Number
Tesla’s next earnings call will take place on October 25th, about a month following the conclusion of the company’s third quarter in September of 2021.
The company’s whisper number is an estimate of $0.76 earnings per share (EPS), which (surprisingly) is right on target with what analysts are saying publicly. Close observers often find the whisper number closer to the mark than the official forecast, but in this case the two being in lock-step doesn’t give outside observers much of an edge as to which way share prices will go post-call.
Why Skeptics May Be Right About TSLA
The bearish case for Tesla is almost as easy to make as the bullish one, which is strange — which is correct? Bearish or bullish? Looking at the numbers, the odds might be in the bear’s favor.
First off, there are the many delays that have plagued the company as a result of problems it has faced with the 4680 battery. This has stalled both the Cybertruck, the Tesla Semi, and potentially other projects the public doesn’t even fully know about yet (such as Tesla’s potential foray into rail, taxi services, and even insurance).
Combine this with potential competition in the electric car market from established manufacturers let alone other big tech companies such as Apple — and the simple fact that Tesla seems to be its own worst enemy at times — and it’s clear that Tesla market share may take a hit, even in an expanding market.
Plenty of investors seem to realize this, as well: the company’s stock has fallen from over $880 at the start of 2021 down to the upper $600s in July of the same year.
TSLA Post Earnings History
Looking at earnings reports of the past, it seems common for Tesla stock to rise initially, even if it eventually ends up taking a dip shortly after. This was the case with its most recent earnings report, and you can see it start to become a trend looking back at earnings reports of the past, as well.
Fear not, those who are bearish on Tesla, because this is a pretty common thing among the biggest companies on the stock exchange — it’s not out of the ordinary for prices to go into flux for a couple of days at least.
Will Tesla Go Up After Earnings?
While Tesla stock went up and then down following the most recent earnings call, who’s to say that the opposite won’t happen come October when the Q3 call takes place?
If Tesla hits all its marks and continues its success story in spite of battery issues and the looming chip shortage facing the auto industry today, then it wouldn’t be shocking to see Tesla stock go up after those Q3 earnings. But should something similar to Q2 takes place, expect that share price to drop like it did during this last week of July 2021.
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