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Tesla Earnings on Deck—Poised for a Surprise?

By:Mike Butler

The expected move for TSLA stock through earnings and the December monthly options cycle is +-$37.76

  • Tesla reports quarterly earnings on Wednesday, Oct. 18, after the market closes at 3:05 p.m. CDT.
  • The company is expected to report earnings per share of $0.74.
  • Traders anticipate the EV maker will report quarterly revenue of $24.22 billion.
  • Both EPS & revenue estimates are lower than what was expected last quarter.
  • Tesla has beaten EPS estimates three of the last four quarters but also missed revenue expectations three of the last four quarters.

Tesla earnings preview

Tesla (TSLA) stock has had a wild 2023 so far, opening at $118.47 and climbing as high as $299.29 on July 19. The stock currently sits around $255 and has a stock price weekly expected move of +-$14.31 based on current implied volatility—pending its earnings announcement.


What's interesting about Tesla's earnings call is earnings per share (EPS) and revenue estimates are both lower than projected last quarter. The consensus on the street is not to expect much this quarter from Tesla unless there is a major surprise in guidance for the rest of the year or an announcement that's not priced into the current earnings implied volatility.

The expected move for TSLA stock through the December monthly options cycle is +-$37.76. So, while this earnings announcement doesn't look flashy, it still makes up for almost half of the remaining expected move for the stock price through 2023.

Bullish on Tesla earnings

TSLA balance

Tesla always a popular stock on a lot of trader watchlists, but the reduction in EPS and revenue expectations for the quarter is causing concern. The company knows the pressure is on to deliver through the rest of the year, so it will need to spin positive light on the situation. At the same time, a big reduction in EPS and revenue estimates from $0.82 to $0.74 and $24.73 billion to $24.22 billion, respectively, means exceeding those numbers could result in a bullish move for the stock. The electric vehicle company has widened the gap from assets to liabilities each year from 2019 to today. So, if you think this reduced expectation could result in a big outperformance, a bullish TSLA stock move could be in the works if the market likes the news.

Bearish on Tesla earnings

When big-name companies reduce earnings expectations, management needs to be careful with the narrative. With so many investors paying attention, one wrong statement could send the stock tumbling. We've seen it happen before with Tesla, and we'll probably see it again. With the bleak economic data that's been released recently, it wouldn't surprise me to see TSLA retreat after this earnings announcement, especially if they miss an already reduced EPS or revenue expectation.

Tune in to Options Trading Concepts Live on Wednesday, Oct. 18, for a full earnings preview with options strategies at 11 a.m. CDT before the announcement happens!

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  

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