Tesla (TSLA) Earnings Preview: What to Expect After Recent Price Cuts?
Tesla (TSLA) Earnings Preview: What to Expect After Recent Price Cuts?
By:Mike Butler
When Does Tesla Report Earnings?
Tesla reports earnings on Wednesday, April 19th after the market closes.
Tesla (TSLA) Q1 2023 Earnings Expectations
The company is expected to announce $0.85 earnings per share (EPS), alongside an estimated $23.36 billion in revenue. The EPS figure is a significant drop from last quarter, which aligns with the company’s recent price cuts across the board, likely in an attempt to strengthen brand loyalty and increase new customer sales.
The implied volatility of the options market projects an expected move of +-12.51 for the rest of the week in TSLA, as of Tuesday the 18th, which is under 10% of the stock’s price. This is relatively low for any stock, especially a typical high-flier like TSLA.
TSLA Stock Performance This Year
.png?format=pjpg&auto=webp&quality=50&width=1000&disable=upscale)
TSLA is up almost 40% YTD, but that doesn’t tell the whole story – the stock is well below the recent high of $314.67 realized in August of 2022. The selloff down to $101.81 was worrisome for investors, but the recent rally brings hope that the recent price cut strategy could pay dividends into the future – quarterly results and 2023 guidance is on the horizon this week.
TSLA Earnings Expected Move
.png?format=pjpg&auto=webp&quality=50&width=1000&disable=upscale)
The implied volatility environment in the options market can tell us a lot about what the market perceives from the earnings announcement for itself – the expected move of TSLA’s stock price is +- $12.54 for the rest of the week – this includes the earnings announcement.
Looking further into the May options cycle and the December cycle, this $12.54 expected move makes up a pretty large chunk of the expected move for the next thirty days (+-$22.53), but not necessarily a big chunk of the expectation for the rest of the year as shown in the expected move in the December cycle (+-$62.65).
.png?format=pjpg&auto=webp&quality=50&width=1000&disable=upscale)
With TSLA trading at around $185 on Tuesday the 18th, we can see that equidistant out-of-the-money (OTM) options at 170 and 200 are trading for roughly the same value – this tells us that the market does not perceive any sort of high-velocity move to be on either side – if the market did, one of these options would be trading for a higher price than the other.
This doesn’t mean the stock is going to stay where it is, it just means that there isn’t a skew in either direction in terms of where a high-velocity move is perceived to be.
With all of this said, a $12 expected move on a $185 stock price is relatively low, which is uncharacteristic of TSLA’s earnings reports historically – We’ll know on Thursday if the market is right and TSLA barely moves, or if there is a big move in TSLA and the implied volatility was off.
Tune in for the fireworks (or lack of fireworks) on Wednesday, April 19th after the market closes at 3pm CST.
Join Mike on Options Trading Concept Live every trading day from 11a-12p CST for a look at earnings trades, options strategy & concept discussions and more!
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.