Earnings Spotlight - Tesla (TSLA)
Tesla (TSLA) begins a busy two weeks of earnings, with some huge companies set to announce Q1 results. The Elon Musk-led EV carmaker reports earnings after the market close on Tuesday, April 23rd.
With TSLA the first of the ‘magnificent 7’ companies to announce earnings, we’ll do a pre-report breakdown of their first earnings report of the year for the fiscal quarter ending March 2024.
Tesla is down more than 25% since January 24th’s Q4 earnings report. Despite the recent stock price decline, analysts project this earnings announcement to beat expectations by 34.59%.
We recently added a new tool to the OA Labs section of the platform that shows analyst’s expectations, stats covering the stock’s historical earnings results, the average move up or down for the stock after a beat or miss (1 day and 5 days after), and many other useful stats to help us make more informed trading decisions across earnings announcements.
Let’s take a closer look at Tesla’s earnings forecast, historical stats, and previous post-earnings performance using Option Alpha’s Earnings tool.
TSLA Q1 earnings forecast
The consensus estimate for Tesla earnings is $0.51 EPS on $21.27B revenue. Analysts project Tesla to beat estimates by 34.59%.
TSLA earnings expectations
- Consensus estimate for TSLA earnings is $0.51 per share on $21.27B revenue
- Analysts project that TSLA will beat estimates by 34.59%
Tesla’s expected move after earnings is +/- 11.95%. Below we’ll compare this expectation with TSLA’s historical price movement after earnings.
TSLA 5-year historical stats
According to the five-year data, TSLA has a record of beating EPS estimates and falling short of revenue estimates. They rarely beat on both or miss on both.
In the last 20 quarterly earnings reports, Tesla has beat EPS estimates 15 times while only beating revenue projections nine times. TSLA has beat estimates for both EPS and revenue 40% of earnings reports in the last five years and missed on both only 20% of the time.
TSLA earnings data
- TSLA beat earnings per share (EPS) estimates 75% of the time in the past five years.
- TSLA beat revenue estimates 45% of the time in the past five years.
- TSLA beat both EPS and revenue estimates 40% of the time and missed on both 20% of the time in the past five years.
TSLA has missed on estimates the last two earnings, but prior to that had beat projections 10 straight times. The largest beat came in July 2020 and the biggest miss occurred in April 2019.
For their last earnings report on January 24th, 2024, TSLA reported an EPS of $0.71 on revenue of $25.17 billion, missing estimates by -2.8%.
TSLA performance post-earnings
Despite a strong record of outperforming analyst’s expectations, TSLA’s stock has declined the day after earnings and five days after earnings in 13 of the last 20 announcements, for a 35% one-day win rate.
In fact, Tesla saw its stock price fall both one day and five days after reporting earnings for every announcement in the last four quarters, experiencing at least a -9% drop five days after earnings.
View TSLA earnings projections and historical stats for the past 5 years in Option Alpha
TSLA earnings: Stock price expected move vs. actual move
TSLA’s expected move is +/- 11.95%.
The expected move is the amount that a stock is expected to move up or down from its current price, as derived from current options prices. Expected move is calculated using the implied volatility of the at-the-money call and put options in the expiration immediately following the earnings report.
The next expiration date following Tesla's earnings is Friday, April 26th, three days after TSLA reports.
We can see in the images above that Tesla’s average move one day after earnings is +/- 8.52%, and the average move five days after earnings is +/- 13.09%.
Earnings implied volatility & options pricing
Implied volatility (IV) is the expected price movement in a security for a specific forward-looking period of time.
As implied volatility increases, options prices increase because the expected price range of the underlying security increases.
Buyers of options benefit from increasing implied volatility, while options sellers benefit from decreasing IV.
Earnings IV crush
Implied volatility typically rises before earnings and the contracts expiring shortly after the announcement become more expensive. Immediately following the earnings report, options prices decline as volatility drops.
This is known as IV crush.
The chart below highlights an example of IV crush after AAPL earnings. Despite any significant price change, we can see implied volatility drop after each of Apple's earnings announcements.
TSLA earnings news headlines
In addition to Tesla’s recent stock decline, they have challenges ahead of reporting Q1 earnings.
Specifically, per Yahoo Finance, “analysts at Barclays have taken a bearish stance on Tesla's stock, warning that the company's upcoming earnings results could drive the share price even lower. The investment bank has dropped its price target on Tesla shares to $180, down from the previous $225.”
Furthermore, Benzinga reports that “to address cost issues, Tesla also began downsizing operations through layoffs announced earlier this week.”
Whether or not these headwinds and year-to-date performance will impact Tesla’s earnings report and subsequent price action remains to be seen. Investors will keep a close eye on TSLA when they announce Q1 earnings after the bell next Tuesday, April 23rd.
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