Tesla Q3 earnings: Production figures signal potential for record revenues

[MongiIG]

Tesla shares come into focus after record production figures for Q3 raised questions over whether we will similarly see revenues hit a fresh high

Source: Bloomberg

 Joshua Mahony | Senior Market Analyst, London | Publication date: Tuesday 11 October 2022 

When will Tesla report their latest earnings?

Tesla will post its financial results for the third quarter of 2022 after market close on Wednesday, October 19, 2022. Tesla management will subsequently hold a live question and answer webcast that day at 5:30 p.m. Eastern Time (10.30pm UK time) to discuss the Company’s financial and business results and outlook.

Tesla earnings –What should traders look out for?

Tesla reports on a quarter that has been tough for investors, with the share price underperforming thanks to a wider market environment that does not favour growth stocks with high P/E ratios. The three-months to September did provide a record high number of sales for the company, with over 365,000 vehicles produced, and over 343,000 vehicles delivered. Nonetheless, this fell short of market expectations, with the stock hitting fresh headwinds as a result. However, those impressive figures are likely to form the basis of a record high revenue figure, with investors keeping a close eye out for any adjustments on margins in the face of recent inflationary pressures.

In his Q2 call, Elon Musk did note that those months were an outlier thanks to the prolongued shutdown of the Shangahi factory. However, the record output from both Fremont and Shanghai forms the basis of a potential blockbuster second half of 2022 if the demand and logistics allow.

Demand has been a key concern for investors, with consumers expected to reign in consumption as the cost of living crisis and recessionary forces impact sentiment. However, Tesla may be an outlier given the long delays people are willing to overcome in a bid to obtain their new vehicle. Whether the firm can better address that solid demand remains to be seem.

Tesla earnings – what to expect

Revenue – $22.2 billion vs $13.7 billion (Q3 2021), and $16.9 billion (Q2 2022).
Earnings per share (EPS) – $1.01 vs $0.62 (Q3 2021) and $0.76 (Q2 2022).

Tesla earnings – valuation and broker ratings

Analysts are largely positive for Tesla shares after the recent declines, with just six ‘sell’ recommendations heading into the third quarter earnings. Out of 32 analysts, there are 27 ‘strong buy’ or ‘buy’ recommendations, and 10 ‘hold’ recommendations.

Source: Eikon

Tesla shares – technical analysis

The weekly Tesla chart highlights the collapse seen over the course of the past month, with price giving way to a fresh bout of losses that have taken the stock into a new three-month low. However, that has taken us into an area of support that looks particularly interesting, starting with an ascending trendline dating back to mid-2021. Aside from that, the 2022 low of $205 and 2021 lows of $179 bring the two subsequent levels of note.

Source: ProRealTime

On an intraday basis, the hourly chart highlights how we continue to produce a nice consistent pattern of lower highs, with further downside expected as a result. We would need to see price rise up through the $244 swing-high to bring about a more positive outlook for this stock.

Source: ProRealTime