Jump to content

Tesla stock price hits eight-month low after earnings

Recommended Posts

Tesla’s stock has fallen further after a poorly-received earnings report this week, with a gloomy outlook contributing to the bearish turn in price.

TeslaSource: Bloomberg

 Written by: Chris Beauchamp | Chief Market Analyst, London | Publication date: 

Tesla slumps after earnings release

Tesla shares experienced a significant decline on Thursday, reaching their lowest point in eight months. The drop in share price was largely attributed to disappointment surrounding the company's latest earnings report, which led to a wave of selling.

In its fourth-quarter (Q4) earnings update released on Tuesday, Tesla reported $25.2 billion in sales and earnings per share (EPS) of $0.71. These figures fell short of average analyst estimates of $25.6 billion and $0.73 respectively, according to FactSet.

Price cuts drive weakness in profits

One of the key factors contributing to the decline in profits was Tesla's decision to implement price cuts on its cars. This move resulted in a significant decrease in profit margins, with the company's gross margin during the Q4 standing at 17.6%, the lowest since 2019 and down over 600 basis points (bp) from the previous year.

Tesla's profits for the last quarter dropped by 40% compared to the same period in 2022, while revenue only experienced a modest 3% year-over-year growth.

Full-year outlook remains weak

For the full year of 2023, Tesla reported EPS of vague warning of "notably lower" output in 2024. This lack of clear guidance from CEO Elon Musk and the company raised further doubts and criticism.

Tesla stock price – technical analysis

The Tesla share price has resumed its long-term downtrend which began in November 2021 and is now trading at levels last seen in May 2023 with the March and April 2023 lows at $163.91 to $152.37 being eyed.

Tesla weekly chart

Tesla weekly candlestick chartSource: TradingView

The fact that a daily chart, and it being Friday, also a weekly chart close will most likely be made below the October 2023 trough at $194.07 is technically bearish.

Resistance now comes in at the late-October 2023 low at $194.07 and also at Thursday’s $206.77 to $193.00 price gap.

Only a currently unexpected bullish reversal and rise above the last reaction high on the daily candlestick chart – a daily high which is higher than that of the preceding and following day – would lead technical analysts to question their bearish outlook. This was made on Monday at $217.80.

Tesla daily chart

Tesla daily candlestick chartSource: TradingView



This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • I'm intrigued by NADA Protocol's vision of integrating blockchain technology into the gaming experience. The prospect of owning and trading in-game items through NFTs adds an exciting dimension to gameplay, offering real rewards and enhancing immersion. The marketplace controlled by the NADA token seems promising, providing a platform for users to engage in trading activities within the gaming ecosystem. I'm optimistic about NADA's potential to carve a niche for itself in the competitive gaming world, especially with its focus on creating a fun and economically rewarding gaming environment. Looking forward to exploring this new gaming frontier!
    • I see DIMO's innovative platform as a game-changer in the automotive industry, offering a new level of connectivity and transparency. With DIMO, I can envision having access to valuable vehicle data that can enhance my driving experience and provide me with insights into the car's condition. This not only makes the car-buying process easier but also instills confidence in the vehicle's history and performance. Moreover, the listing of DIMO's native token on Bitget exchange is exciting news as it will create more exposure for the project, potentially leading to further advancements and adoption in the automotive space.    
    • The growth trajectory and innovative approach of Autonolas are indeed impressive, signaling its potential to disrupt both the crypto and AI sectors. With its unique blend of off-chain services and AI capabilities, Autonolas has positioned itself as a key player in the evolving landscape. Furthermore, the listing of its utility token OLAS on Bitget exchange, coupled with a favorable price trend and deposit rebate, adds to the project's appeal and growth prospects. Exciting times ahead for Autonolas and its investors.
  • Create New...