Tesla Stock Price and Forecast: Where is TSLA headed after Q1 earnings blowout?

Update: Tesla (TSLA) reported its Q1 earnings after the NY close, blowing away Wall Street's forecast. The EV leader posted record profits once again. The company earned adjusted income of $3.7 billion, 30% higher than the previous record of $2.9 billion it posted in the fourth quarter of last year. Revenue of $18.8 billion also bettered estimate while rising 6% from the previous quarter's sales.

Following the earnings report, CEO Elon Mush said in an investor call, “Tesla Shanghai ... is coming back with a vengeance. So I think notwithstanding new issues that arise, I think we will see record output per week from [Tesla's factory in] Shanghai this quarter, albeit we are missing a couple of weeks." 

Tesla (TSLA) is next up on the slate of mega tech earnings after the close on Wednesday, and it will be closely watched as the stock market grows increasingly nervous after Netflix earnings on Tuesday evening. The streaming giant collapsed 25% in afterhours in a move reminiscent of Facebook's last report. Or in fact, the move is reminiscent of Netflix itself as this is the second earnings release in a row where the stock has cratered over 20% on an earnings release. TSLA stock itself was hit on its previous earnings, losing 11% back on January 26.

Tesla Stock News: Earnings are all that matters

Really earnings will be the main driver of the stock price, not Elon Musk or his Twitter (TWTR) takeover campaign. Deliveries will be key, and so too will outlook. Increasing reports are circulating about logistics supply chains coming into disruption following multiple lockdowns in Shanghai. The number of ships stuck in or around Shanghai's port has rocketed to gridlock levels. Tesla, along with many other companies, was forced to shut down production in Shanghai.

Tesla announced Q1 deliveries of 310,000 in early April. This was a record number but fell short of analyst estimates, which were set at closer to 320,000. However, in the wake of that slight miss, we do not notice any analyst figures being lowered, so we are left with the assumption that the analyst estimates are too high. Added to that is the situation in Shanghai, meaning we just cannot see how Tesla is going to beat delivery numbers. Even noted Tesla bull Dan Ives of Wedbush outlines some concerns in a note to clients on Tuesday. 

“The main question for tomorrow is just how bad the China production issues are and what that means for deliveries in 2Q and the rest of the year,” Ives wrote. “Musk & Co. are in a tough spot, as there are so many variables around 2Q China production that will certainly weigh on guidance for the rest of the year and thus there has been a clear overhang on the stock over the past month.”

Tesla Stock Forecast: $1,152 key resistance

We have previously identified the downtrend that Tesla is in based on the medium to longer term time horizon. A series of lower highs with the latest one being at $1,152 is the main feature. This is our pivot, and we remain bearish below it. The extended target is the most recent low at $700. Good earnings, even those that are broadly in line, with a reasonable outlook should see Tesla spike higher in a relief rally. Positioning is slightly skewed to the downside, including this author who is short the stock. Demand remains strong for all EVs and Tesla, but this is a supply issue. If Tesla can somehow overcome that then the stock can rally, but we feel it will not overcome that challenge until Q3 this year. First support is $945 and then $893 from the 200-day moving average. 

TSLA stock chart, daily

The author is short Tesla