Tesla (TSLA) Earnings Report: Date, Expectations, & Trade Ideas

Earnings Spotlight - Tesla (TSLA)

Tesla (TSLA) begins a busy two weeks of earnings, with most tech giants set to announce Q2 results in the next ten days. The Elon Musk-led EV carmaker reports earnings after the market close on Tuesday, July 23rd.

TSLA Q1 earnings recap

Tesla's last earnings announcement was on April 23rd. TSLA reported Q1 earnings with an EPS of $0.45 on revenue of $21.30 billion, missing estimates by -8.54%. This marked the third straight quarter TSLA missed on analyst's projections.

However, despite the miss, the stock rose 12% the day after the report (after dropping -22% in the 10 trading days prior), and finished the week up over 16%.

TSLA Q2 earnings forecast

The consensus estimate for Tesla earnings is $0.60 EPS on $24.19B revenue. Analysts project Tesla to beat estimates by 13.88%.

TSLA earnings expectations

• Consensus estimate for TSLA earnings is $0.60 per share on $24.19B revenue
• Analysts project that TSLA will beat estimates by 13.88%

Tesla’s expected move after earnings is +/- 8.45% ($21.06). Below we’ll compare this expectation with TSLA’s historical price movement after earnings and explore bactested earnings trades.

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 three earnings, but before that they beat projections 10 straight times. The largest beat came in July 2020 and the biggest miss occurred in July 2019.

TSLA performance post-earnings

Despite a strong record of outperforming analyst’s expectations, and a strong Q1 earnings beat, TSLA’s stock has declined the day after earnings and five days after earnings in 12 of the last 20 announcements, for a 40% win rate.

Tesla's end of week performance after earnings shows an average move of +/- 12.41%, with a 28.86% best and -13.93% worst performance.

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 +/- 8.45% ($21.06). 

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, July 26th, three days after TSLA reports.

TSLA backtested earnings trade ideas

Earnings announcements give us a cyclical opportunity to take advantage of unique trading opportunities. Option Alpha's Earnings Edge backtester was created to provide us with a way to make calculated decisions using historical data and current market conditions for symbols reporting earnings.

There are currently 70 backtested earnings trade ideas for TSLA expiring this Friday, July 26th:

Click on any position to see five years of backtested results using the OTM %, spread width, and reward/risk:

The earnings backtester analyzes the selected position's metrics across previous 5 years of earnings reports, including the percentage the strike prices are out-the-money (OTM%), the credit or debit, the spread width and/or the max loss.

It then simulates opening a position with the same metrics right before each earnings report and holding it until the next end of week (EOW) expiration, calculating the P/L and ROR for each simulated position based on the symbol's closing price at the EOW expiration.

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.