Tesla stock price was up by 11.9 percent in Thursday’s pre-bell session, trading at $239.20 following a surprise earnings beat. The stock has a lease of life after staying subdued since its robotaxi reveal on October 10. The company has struggled to replicate its sales success of 2023 this year, and traders had understandably trimmed their uptake of the stock in recent weeks.
However, Tesla (NASDAQ: TSLA) had a multi-thronged good news in its Q3 earnings report. First, the company reported revenues of $25.18 billion, up from $23.40 in the corresponding quarter last year. In addition, it reported an EPS of $0.72, beating the consensus forecast of $0.60. Also, the gross margin came in strong at 19.8 percent, substantially exceeding the forecast figure of 16.8 percent.
A key talking point around the earnings call was the company’s Full Self Drive (FSD) revenue, which came in at $326 million for the quarter. This validates Elon Musk’s focus on the segment on which the recently-launched Cyber cab and Robo Van are built. In addition, the company has been speeding up the integration of FSD software in some of its existing models.
Tesla aims to roll out hailing FSDs in Q2 2025, with initial launches targeting California and Texas. According to Musk, the FSD service has registered a spike in customer uptake since the Robo taxi event. There was more good news for Tesla investors. Overall, the company projects a 20%-30% sales growth next year.
In addition, the company reported strong demand for its energy storage business, with Musk describing it as a “growing like a wildfire”. Tesla’s Shanghai gigapack factory is nearing completion, and that could expand the company’s energy revenues exponentially. Finally, the company also hopes to introduce a sub-$30k model next year. That will enable it to compete favourably against Chinese EVs.
On the downside, however, much will depend on the current tariffs. Trade wars between China and the United States could disrupt growth and bring headwinds to the EV industry. Nonetheless, the strong Q3 earnings and positive guidance will likely keep Tesla stock price on the upside in the near-term.
Tesla stock is on an upbeat momentum, and the buyers will stay in control if the price action stays above 234.80. With that, the first barrier is likely to come at 240.40. However, a stronger upward momentum could convert that mark into a support level, and instead take the stock higher to test 246.00.
On the other hand, moving below 234.80 will signal the onset of control by the buyers. If the downward action persists, the first support could come at 230.05. However, an extended control by the sellers could break below that mark, rendering the upside narrative invalid. Meanwhile, the downside could extend to test the second support at 224.20.
This post was last modified on Oct 24, 2024, 11:55 BST 11:55