Nothing changes moods quite like price. Since reaching a record level in the summer of 2023, Tesla has seen a 50% drop, and since the start of the year, nearly 40%. It’s safe to say that expectations are now low, and although this isn’t yet territory where Elon Musk’s company can make a breakthrough, it seems to be a monumental report.
We anticipate a decline in quarterly earnings, with analysts forecasting $0.46 per share, representing a 45% decrease from the previous year. Similarly, revenue forecasts are set at $22.17 billion, which would mean a 5% year-over-year decrease. These downward revisions to estimated earnings over the last month are one reason why their stock price would need to double to return to the highest transaction price.
In addition to revenue forecasts, analysts are closely monitoring Tesla’s operational indicators. Despite the expected decline in total automotive revenue and the overall number of vehicle deliveries, there are positive forecasts for specific segments such as “Model 3/Y deliveries” and “deployed storage,” indicating areas of potential growth. However, the anticipated decline in “Gross Profit – Total Automotive” highlights the importance of assessing profitability along with revenue data.
It’s worth noting that when expectations are low, sometimes “less bad news” can spark a recovery. Investors may be looking at Tesla’s potential value ahead of the earnings report, and any signs that the situation isn’t as bad as recently priced could be enough for bulls to step in or bears to take a breath. Yet, another report that fails to meet expectations, and the lowest level from December 2022 at $102, may be within reach, signifying a -75% drop.
Sam North, eToro
