Tesla’s Q3 Earnings Preview: A Mixed Bag of Challenges and Opportunities
Tesla (TSLA) is set to announce its third-quarter earnings for 2024 on October 23. Analysts expect earnings of $0.60 per share, which represents a 9% decline from the same period last year. This anticipated drop is largely attributed to decreasing profit margins linked to Tesla’s recent price reductions in key markets, amid rising competition and industry-wide challenges.
The performance of Tesla’s margins will be a crucial indicator in this upcoming report. Over the past three months, Tesla’s stock has already declined by 13%. However, if the company can deliver stronger earnings and maintain healthier margins, it may positively influence its stock price.
Encouragingly, projected revenue for Q3 is expected to hit $25.46 billion, reflecting a 9% year-over-year increase, according to data from the TipRanks Forecast page below.
Key Indicators Prior to Q3 Results
Earlier this month, Tesla reported its Q3 vehicle deliveries, reaching 462,890 units. This figure is a 6% increase from last year but fell slightly short of analysts’ expectations of 463,310 units. This highlights the ongoing economic pressures and increased competition, especially in China.
Another notable event before the Q3 report was the October 10 Robotaxi showcase, where Tesla unveiled the Cybercab. However, investor reaction was lukewarm due to a lack of detailed information at the event.
Despite this, Elon Musk’s focus on advancements in robotics could serve as a sound long-term strategy as Tesla seeks to diversify beyond the competitive electric vehicle sector.
Market Expectations for Stock Movement
Analyzing options activity through TipRanks’ Options tool reveals traders’ expectations regarding the stock post-earnings. At a $207.5 strike price, call options are priced at $13.49 compared to put options at $0.01, indicating an anticipated price movement of approximately 7.39% based on the at-the-money straddle.
Wall Street’s Take: Buy, Sell, or Hold?
Wall Street’s consensus rating for Tesla stock is a Hold, based on 11 Buys, 16 Holds, and eight Sells over the last three months. Currently trading at $207.83, analysts predict an average price target suggesting a 5.83% downside potential.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
