To The Moon

$Tesla Motors(TSLA)$ will reporting its financial report for the fourth quarter of 2024 after market close on 29 Jan 2025 (Wednesday).

Tesla's Q4 revenue is expected to be $27.195 billion, adjusted net income is $2.66 billion, and adjusted EPS is $0.748, according to Bloomberg's consistent expectations.

But market is looking at $0.76 for the earnings per share consensus.

Tesla (TSLA) Last Positive Earnings Call Saw 85% Share Price Growth Since

We saw TSLA share price grow 85.89% since its last positive earnings call on 23 Oct 2024, Tesla's Q3 2024 earnings call highlighted strong delivery records, profitability, and advancements in autonomous technology, despite some challenges with ASP reductions and regulatory delays. The company remains optimistic about future growth and technological advancements.

The recent release of the annual deliveries saw Tesla report the first-ever drop. This is something we might look at.

Tesla (TSLA) Guidance To Focus On Cost Reduction And Efficiency

In Tesla's Q3 2024 earnings call, the company provided comprehensive guidance, highlighting its record achievements and future projections. Tesla reported a record quarter with $6.3 billion in operating cash flows and record deliveries despite industry-wide declines.

Elon Musk emphasized the production of their seventh million vehicle and anticipated a 20%-30% growth in vehicle deliveries for 2025, contingent on external factors. The energy storage business is flourishing, with the Lathrop Megapack factory reaching a 40 GWh annual run rate and another factory in Shanghai set to begin with a 20 GWh run rate in Q1 2025.

Tesla aims to deliver affordable models in the first half of 2025 and achieve volume production of the Cybercab by 2026, with a target of producing 2 to 4 million units annually. The company is quickly advancing its 4680 cell technology to become the most cost-competitive in North America.

On the autonomy front, Tesla expects significant improvements with FSD version 12.5 and version 13, aiming for unsupervised driving by Q2 next year. The company also plans to roll out ride-hailing services in Texas and California in 2025, subject to regulatory approval.

Tesla continues to focus on cost reduction and efficiency, achieving its lowest cost per vehicle in Q3 2024, and plans to increase AI and energy infrastructure investments, with CapEx expected to exceed $11 billion for the year.

With the reduction in average selling price due to the financing incentives, this is going to impact Tesla as the new administration has indicated to remove this, this would impact TSLA revenue in 2025.

Factors Help Third Quarter Earnings, Challenges For Fourth Quarter

Record Deliveries Amidst Industry Decline. 2024 First-Ever Drop In Annual Deliveries

Tesla reported record deliveries in Q3 2024, despite industry-wide declines in order volumes. But the overall 2024 drop as compared to 1.81 million deliveries in 2023. It reported 484,507 deliveries in the fourth quarter of 2023.

Profitable in Challenging Environment

Tesla remains profitable despite a challenging automotive environment, marking a record Q3 for the company.

Energy Storage Business Growth

Strong demand for Megapack and Powerwall, with the Lathrop Megapack factory reaching a 40 GWh annual run rate.

Autonomous Vehicle Milestones

Successful operation of 50 autonomous vehicles, including Cybercabs and Model Ys, with no incidents.

FSD Improvements But Regulatory Potential Delays Still Exist

Significant improvements in Full Self-Driving (FSD) software, with expectations to surpass human driving safety in Q2 2025.

Potential delays in regulatory approval for unsupervised FSD in California and other states.

Automotive Revenue Growth But Sustaining It Might Be Challenging

Automotive revenues increased both quarter-over-quarter and year-over-year, with record operating cash flows of $6.3 billion.

Sustaining Q4 automotive margins is expected to be challenging due to the current economic environment.

Strong Energy Margins But The Quarterly Fluctuations Also A Concern

Energy margins hit a record at more than 30%, with expectations to more than double deployments by the end of the year.

Quarterly fluctuations in energy deployments due to customer readiness and location of orders, despite a strong overall demand.

Service Improvements

Enhancements in service operations, including opening nearly 70 new locations and expanding existing service centers.

Tesla (TSLA) Options Market Slightly Bullish From Skew

The options market overestimated TSLA stocks earnings move 17% of the time in the last 12 quarters. The predicted move after earnings announcement was ±8.0% on average vs an average of the actual earnings moves of 10.8% (in absolute terms). This shows that TSLA tended to be more volatile than the options market predicted for the earnings stock price reaction.

Tesla has posted its fourth-quarter vehicle production and deliveries report. It reports first-ever drop in annual deliveries, results for the quarter represented the first annual drop in delivery numbers for Tesla, which reported 1.81 million deliveries in 2023. It reported 484,507 deliveries in the fourth quarter of 2023.

TSLA implied volatility (IV) is 61.7, which is in the 76% percentile rank. This means that 76% of the time the IV was lower in the last year than the current level. The current IV (61.7) is -9.7% below its 20 day moving average (68.4) indicating implied volatility is trending lower.

The implied volatility skew shows the market's bias for pricing in volatility risk to the option premium of downside puts and upside calls.

The implied volatility for downside puts is decreasing relative to upside calls, then that suggests the market is pricing in a potential upside move.

Technical Analysis - Exponential Moving Average (EMA)

Tesla daily uptrend is into some consolidation. Tesla was down at one point almost 4% and they are losing more and more ground right at $377 level.

The expected move for Tesla earnings is quite large this week and all things considered it is about 8% to the downside. That would put us down into the $360 range, with prior support of $350 to $330.

If we looked to the upside well it would put us right back to where we were a few short weeks ago around the $430 level, but it will be very tough.

But I will need to watch if TSLA is going to lose that big level before its earnings, yet I do not think TSLA is going to break so much before earnings.

I will see whether the TSLA bulls can continue to defend this level ($385), and continue to build their daily uptrend expansion.

Summary

I would be monitoring TSLA to see if can take a position for quick trade around $385, as there might not be any big gap up for this upcoming earnings due to the potential removal of the financing incentives.

Appreciate if you could share your thoughts in the comment section whether you think TSLA could provide an earnings surprise if it can reduce its cost significantly.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.