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Tesla Falls on Earnings Miss

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Tesla shares are trading below yesterday’s closing price ahead of the US open today. The company saw its stock price slide over the last week or so, correcting from recent all-time highs around the 900 level to around 835 as of writing.

Investors will likely be a little worried, on the back of 2020’s record rally which saw Tesla shares soar over 800% higher. However, a weaker than expected set of q4 earnings might give some pause for thought.

Earnings Miss, Revenues Beat

Tesla reported fourth-quarter earnings per share of $0.80, undershooting the $1.03 Wall Street was looking for. However, revenues were higher than expected at $10.74 billion versus $10.4 billion projected. The company has seen its revenues growing steadily over the last year as a result of a massive uptick in sales.

The company broadly hit its 500,000 new vehicle deliveries target, boosted by a surge in production over the year. Tesla hit new records for both production and deliveries over the year. This was despite the disruption caused by the pandemic.

Faster Delivery Growth Projected

Looking ahead, Tesla expects even faster vehicle delivery growth in 2021 as a result of two new production sites due to come online this year. The new sites, in Germany and Texas, will be focusing on Model S and Model X vehicles.

Tesla said:

“Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries.”

FSD Non-Transferrable

Speaking on the earnings call, Tesla CEO Elon Musk said that the company would be commencing deliveries of its upgraded Model S vehicle in February. Tesla is also aiming to provide its Full Self Driving option on a subscription basis. This means that customers won’t need to pay the $10k upfront price to access the premium driver assistance software.

Additionally, Musk noted that previous versions of the FSD, bought for former vehicles could not be transferred to a new Tesla vehicle. The price of the software would be accounted for in the trade-in price but would not be transferable.

Tesla Testing Support

tesla shares

Tesla shares have seen a significant rally over recent months which has created plenty of space between key technical levels.

Following the failure at the retest of the 886.71 level, price has since corrected lower and is now testing the 802.53 support. While this level holds, the near term focus is on continued upside. Should price break below here, however, the next level to watch is down at the 698.01 region.

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