Tesla revenue miss the focus as TSLA stock slides in premarket

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