Tesla Q1 earnings: strong deliveries, unfavourable headlines

Tesla is due to report Q1 earnings on Monday. The numbers come as Tesla has underperformed the broader market, but beat on deliveries. Recent headlines have raised questions over the self driving car function.

Tech (1)

When:

Monday 26th April after the close

What to watch?

Expectations:

EPS of $0.77

Revenue of $10.33 billion.

Deliveries

Tesla’s vehicle delivery numbers beat forecasts at 185,000 in the first three months of the year. This was ahead of consensus estimates and bodes well for the year ahead. Deliveries are expected to pick up firmly in the second half of the year. Expectations are for full year deliveries at 831,000. Guidance for full year deliveries has the potential to move the market so watch for any number that is notably above or below this figure.

Competition

Results come Tesla trades 20% off its all time high. With competition increasing there is a chance that Tesla will start to lose some market share. More traditionally focused automobile makers such as VW, General Motors and BMW are stepping up their focus and operations towards EVs.

That said, demand is also expected to start increasing for EVs as governments across the globe make pledges to cut carbon emissions and boost the sustainability of cities and countries.

Self-driving car

Tesla’s results also come at a time when questions are being raised over its autopilot self driving system. Following a crash earlier this week, Tesla shares came under some pressure. In order to really stand out from its competitors Tesla would need to see significant progress towards the self-driving car goal. Given this week’s headlines we could still be some way off here.

Where next for Tesla share price?

Tesla continues to trade above its ascending trend line dating back to mid-March in an established bull trend. It also trades above its 50 & 100 EMA however, more recently the move is stalling. A move above $785 in needed for the buyers to gain traction and the trend resume its upwards march.

Strong earnings could prompt such a move, opening the door to the all time high at $900. A move below $665 100 EMA could see the sellers gain traction and push the prices towards support around $630 the ascending trendline.

For now, much of the good news is probably baked into the price. Very impressive guidance or huge developments in the  self driving car would be needed to drive the share price significantly higher.

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