Tesla Q2 Earnings Preview: Investors Put Focus on Margins and Sales
Tesla Q2 Earnings Preview: Investors Put Focus on Margins and Sales
The company’s price chart indicates Tesla provides a moderately bullish technical structure
Tesla is scheduled to report second-quarter earnings after market close. tomorrow.
The company’s stock price remains nearly unchanged for the year after an early July rally.
The earnings report could influence broader market sentiment as volatility increases.
Tesla (TSLA) will report second-quarter earnings after the market closes tomorrow, and a live webcast will follow be available at 4:30 p.m. CDT. The webcast will cover Tesla’s financial results and share management’s answers to questions from analysts. The earnings come amid an increasingly volatile market landscape as the U.S. political backdrop rapidly shifts.
The stock price is nearly unchanged from Jan. 1. It rallied over 24% in July after investors turned bullish on the electric-vehicle (EV) maker following its quarterly production and deliveries report released July 2.
Tesla delivered 443,956 EVs for the quarter ending June 30, bringing its first-half 2024 total to 830,766. Production came in at 410,831 EVs. The full-year target is for 2 million deliveries, which puts Tesla slightly behind schedule halfway through the year. Tesla’s Model Y outsold every other car model in 2023, according to JATO Dynamics, an auto industry data and analytics provider.
The report will be among the first from the Magnificent Seven, which account for almost half of the Nasdaq’s weighting. Alphabet (GOOG) will report its earnings alongside Tesla tomorrow.
What do investors expect from Tesla?
Analysts anticipate that earnings per share (EPS) will come in at $0.62 on revenue of $24.7 billion, according to Yahoo Finance. Those estimates have improved slightly over the past couple of months, rising by $0.02 per share. However, that would mark a single-digit year-over-year decline for revenue and a double-digit decline for EPS.
Besides financial results, investors are keen to hear plans for the company’s robotaxi. CEO Elon Musk stated on X this month that design changes in the car will require extra time to put it into production. The robotaxi was originally slated for release in August.
Consumer appetite for full self-driving (FSD) cars is also in the spotlight following a price cut of $4,000 for the technology. That brought the cost down to $8,000. Its margin outlook is also in focus after Tesla implemented cut price cuts for its cars over the past year.
The company may also talk about its Model Y relaunch, scheduled for next year, as the company intends to produce a low-cost model to broaden its customer base. Musk said last month it wouldn’t happen this year, but we may get some clues on the timeline during the call.
Competition in China is another focal point as Tesla battles a quickly evolving landscape in the overseas market as competitors like BYD expand their sales efforts.
Trading Tesla earnings
Tesla holds an implied volatility rank (IVR) of 69.7 as of today. The expected move based on options pricing is +/- 21.78 points for the July 26 expiration. That move represents about 8.7% of the current stock price.
Traders who are confident of Tesla delivering an upbeat earnings report may decide to take advantage of the elevated premium to play defined-risk credit strategies on the stock price.
Looking at the price chart, we see Tesla provides a moderately bullish technical structure. The 50-day simple moving average (SMA) is on track to cross above the longer-term 200-day SMA, which would generate a bullish signal known as a Golden Cross.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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