Will Tesla's stock price soar after the release of its financial report?
Main Content
Tesla is set to release its second-quarter financial report after the market closes on July 19, Eastern Time. The market expects Tesla's revenue for this period to be around $24.66 billion, with an adjusted net profit of $2.85 billion. We anticipate that Tesla's financial performance will align with market expectations. However, given the significant increase in Tesla's stock price over the past few months, we do not recommend investors to chase after further gains.
Tesla's Financial Report to be Released: Which Key Points Deserve Attention?
After-market on July 19th, Tesla will release its financial results for the second quarter of 2023. According to Bloomberg data, the market expects Tesla's revenue for this quarter to be around $24.66 billion, higher than the first quarter's $23.3 billion, with adjusted net income of $2.85 billion.
Considering that Tesla delivered over 466,000 vehicles in the second quarter, surpassing the first quarter's 423,000 vehicles, the revenue forecast for Tesla doesn't seem exaggerated.
Currently, the market's main focus is on Tesla's gross margin for Q2. Tesla's gross margin for the first quarter was only 19.3%, falling below the 20% threshold and declining by 6.3% compared to the previous quarter, significantly impacting market sentiment. According to Bloomberg, the market widely expects Tesla's Q2 gross margin to be 18.7%, a decline of 0.6% compared to the previous quarter, mainly due to Tesla's price cuts and discount strategies in the United States.
Some Wall Street analysts are even more pessimistic. Analyst Colin Langan from Wells Fargo believes that due to continued price reductions and weak product mix, the automotive gross margin is expected to decrease to 17.5%.
In addition to the automotive gross margin, we believe Tesla's AI business is also worth paying attention to.
Tesla has surged over 145% this year, partially due to riding the AI concept wave. Tesla has been making strategic moves in the field of artificial intelligence and technology, with Elon Musk frequently discussing the opportunities brought by full self-driving, Tesla robots, and the Dojo supercomputer.
However, according to the financial report, currently, only the Full Self-Driving (FSD) business contributes a small portion of revenue, indicating that the short-term contribution of the AI business to Tesla is not significant.
【Source：TradingView】
Attention should be given to Tesla's guidance for the next quarter, as it will determine the price trend after the financial report is released.
Wall Street's Bull-Bear Divide Intensifies: How Will This Earnings Report Affect Stock Prices?
As Tesla's earnings report is about to be released, the divergence between bulls and bears on Wall Street is intensifying, with an average target price difference of $85 among "buy" and "hold" rated analysts, setting a new recent record. Overall, analysts with a "buy" rating have an average target price of $300, slightly higher than Tesla's current stock price; analysts with a "hold" rating provide target prices ranging from $165 to $265 per share, with an average of around $215, significantly lower than Tesla's current stock price. Many people are eager to know the impact of the earnings report on Tesla's stock price. We have summarized the price fluctuations after Tesla's earnings reports over the past four quarters: As seen, Tesla's stock price experiences significant volatility after each earnings report. Given the heightened divergence between bulls and bears on Wall Street this time, the impact of this earnings report on Tesla's stock price is expected to be even greater.
【Table: Compiled by Mitrade】
【Table: Compiled by Mitrade】
Forecast & Technical Analysis
We anticipate that Tesla's financial performance in the upcoming report will align with market expectations. Considering the significant price surge of Tesla in the past few months, we do not recommend investors to chase after higher prices. From a technical perspective, there is an ascending triangle formation in Tesla's chart, gradually narrowing down, indicating a cautious downward correction in the short term. The support level can be seen near the 21-day moving average at around 265 points, while the resistance level is at 303. 【Source：TradingView】
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
