Tesla revenue miss the focus as TSLA stock slides in premarket

Tesla stock falls over 5% as earnings released post-session on Wednesday.
Tesla beat on EPS but missed on revenue.
Tesla CEO Elon Musk remains bullish on prospects for the EV leader.

Ivan Brian FXStreet

Tesla (TSLA) reported earnings after the close last night, and without even looking at them we must assume they disappointed the market. Tesla shares quickly fell 3% and have not recovered in the premarket. Sentiment toward high-growth names was not helped by the continued spike higher in bond yields, but with earnings releases up until now largely coming in ahead of estimates for the broader market, hopes were high that Tesla could continue this trend.

Tesla stock news

However, it was not to be in the case for Tesla. While earnings per share (EPS) did come in ahead of forecasts at $1.05 versus $0.99 consensus, revenue missed what Wall Street was expecting – $21.45 billion versus $21.96 billion.

Elon Musk participated in the post-earnings conference call and was bullish on the prospects for the future of Tesla. He said he saw a path for Tesla to be worth more than Apple and Saudi Aramco combined.

“I can’t emphasize enough [that] we have excellent demand for Q4, and we expect to sell every car that we make for as far into the future as we can see,” Musk said. “The factories are running at full speed, and we’re delivering every car we make and keeping operating margins strong."

Tesla did keep margins steady at 27.9%, which was an achievement in the inflationary environment. Tesla runs some of the highest (I think the highest) margins in the auto business, which is used to partly justify its high P/E ratio as well as its strong growth historically. Revenue, while missing estimates, was over 50% higher than a year ago. The company maintained its guidance for an over 50% growth rate in deliveries over a multi-year time frame.

Tesla stock forecast

Here we go again with another test of support at $207 coming up. The rise in bond yields is not helping Tesla's cause and added pressure from earnings could see the $207 level finally break. That would in my view lead to a target of $160, which is the lower trend line and the 200-week moving average. If $207 can hold, then a period of stabilization would target $254 and the gap to $266. That will need a broad equity market rally, I believe, as sentiment toward Tesla will be clouded by this earnings report. $207 is the key pivot.

Tesla 20-hour stock chart

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

AUD/USD edges higher above 0.7050 as hot CPI lifts RBA rate hike odds

The AUD/USD pair gathers strength to near 0.7055 during the Asian trading hours on Thursday. The Australian Dollar edges higher against the US Dollar as hotter inflation data bolsters expectations of Reserve Bank of Australia rate hikes. The US September Personal Consumption Expenditures inflation report will be in the spotlight later on Thursday.

USD/JPY retakes 158.00 as USD stalls the post-FOMC corrective slide

USD/JPY attracts some dip-buyers during the Asian session on Thursday, climbing back above 158.00 as the US Dollar reverses part of the post-FOMC pullback from a two-week high. Bulls, however, await key US macro data – the Advance Q3 GDP and the PCE Price Index – before positioning for further gains. Focus will then shift to the crucial BoJ policy update on Friday amid firming expectations for a December rate hike.

Gold weakens further below $4,050 amid Fed rate hike bets and Iran risks

Gold sticks to intraday losses below the $4,050 level heading into the European session ,and for now seems to have snapped a three-day winning streak to the weekly top set the previous day. The US Dollar attracts fresh buyers after Wednesday's post-FOMC corrective slide from a two-week high and is seen as a key factor weighing on the precious metal.

US GDP expected to grow at 3.2% in Q3

The United States Bureau of Economic Analysis is set to publish its preliminary estimate of the Gross Domestic Product for the July-September period on Thursday, with analysts expecting the data to show annualised growth at a solid 3.2%, a decent improvement from the 2.2% expansion recorded in the previous quarter. Markets brace for US growth and PCE data amid geopolitical jitters

European Central Bank is expected to hold interest rates despite high inflation pressures

The European Central Bank concludes its two-day monetary policy meeting on Thursday and will announce its decision at 13:15 GMT. The bank is widely expected to leave the interest rate on the Main Refinancing Operations and the Deposit Facility unchanged at 2.65% and 2.50%, respectively, after having raised both of them by 25 basis points in September.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.