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Tesla Earnings Preview: Down Over 43% This Year

By:Mike Butler

Tesla slashed EV prices in major markets recently amidst the increasingly competitive landscape for electric vehicles

  • Tesla is set to report quarterly earnings on Tuesday, April 23 after the market closes.
  • After missing estimates last quarter, Tesla is now expected to report EPS of $0.50 on $22.26 billion in revenue
  • Both estimates are significantly lower than last quarter's results, which came in at an EPS of $0.71 on $25.17 billion in revenue.
  • The expected stock price move is almost +-10% this week, so markets are expecting volatility.

Tesla (TSLA) endured an abysmal start to the 2024 trading year, with the stock down over 43% while markets like the S&P 500, Nasdaq and Bitcoin have ripped higher.

It appears Tesla is in the middle of a turbulent time, with electric vehicle (EV) competition spiking, and Tesla car prices being slashed.


Tesla will report quarterly earnings on April 23 after the market closes. The popular car maker is expected to report an earnings per share (EPS) of $0.50 on $22.26 billion in revenue, both figures significantly down from the previous quarter's estimates that were both missed.

During the last earnings announcement, Tesla highlighted vehicle production and delivery growth was highlighted:
"In the fourth quarter, we produced approximately 495,000 vehicles and delivered over 484,000 vehicles. In 2023, vehicle deliveries grew 38% YoY to 1.81 million while production grew 35% YoY to 1.85 million," Tesla said in a Jan. 2 press release. "Thank you to all of our customers, employees, suppliers, shareholders and supporters who helped us achieve a great 2023."

A turbulent stock

TSLA stock has been turbulent over the past year, reaching a low of $152.37 in April 2023. The stock then rallied to a high of $299.29 in July 2023, only to fall all the way back to a new low of $138.80 today.

Current issues for the company revolve around heightened competition from other automakers, which have forced Tesla to slash model prices recently. With the stock reaching new 52-week lows today with earnings on the horizon, it's no surprise to see high implied volatility for this week in Tesla.


What options tell us

Looking at the implied volatility of the options market can tell us a lot about earnings expectations, at the very least. With Tesla currently trading around $140 per share, we can see an expected stock price move of +-$14.01 for this week that contains the earnings announcement. This is 10% of the stock price, which is a relatively high weekly expected move for an earnings announcement, considering most stocks that report this quarter will have an expected move around 5% to 10% of the stock price.

Looking further through the year, we can see the +-$25.48 stock price expected for June and a +-$48.35 expected move through Dec. This tells us that the market is placing a heavy weight on the earnings announcement this week, since the weekly expected move makes up over 25% of the move that's expected throughout the rest of the year.

Bullish on Tesla for earnings

Oh, Elon. Can he single-handedly save this recent selloff with some positivity around Tesla?

The company is in a tough spot right now with price cutting, which obviously hurts revenue estimates moving forward. The EPS and revenue figures have been lowered from the last quarter that they still missed.

Tesla bulls likely want to hear a plan of resolution in this regard, and maybe a positive surprise that the market isn't expecting. An EPS and revenue beat this time around wouldn't be a bad place to start for Tesla bulls, after reporting such a strong 2023.

Bearish on Tesla for earnings

Tesla bears may believe this selloff is just the beginning for the EV carmaker. Heightened competition can often translate to tougher differentiation. If Tesla misses lowered EPS and revenue figures it would be surprising to see a bullish move.

With many other sectors in the general stock market taking off this year, traders and investors may just be done with the turbulence in Tesla and move on to something else if Tesla fails to paint a pretty picture for the rest of the year.

Tune in to Options Trading Concepts Live at 11 a.m. CDT on Tuesday ahead of Tesla's earnings announcement, for an in-depth implied volatility and options strategy overview.

Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro. 

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