Tesla Motors (TSLA) Q2 earnings: What chip shortage?!

Early indications are that Tesla has navigated the chip shortages well heading into Monday's highly-anticipated earnings report...

Tech (1)

While other space-obsessed billionaires are blasting off into space, Elon Musk is more focused on earthbound transportation concerns. After the stock of his ballyhooed electronic vehicle company Tesla Motors (TSLA) went on a rollercoaster ride through the first half of the year Wall Street will tune in for an eagerly-anticipated update on the firm’s Q2 results.

When are TSLA earnings?

Monday, July 26th after the closing bell.

What are TSLA’s earnings expectations?

Per FactSet, consensus GAAP expectations are for $0.53 in EPS, with adjusted EPS expected to come in at $0.93 per share. Revenue is expected to come in at $11.47B.

Key themes to watch from TSLA earnings

As with any automobile manufacturer in the current environment, traders will be keen for an update on how Tesla is navigating the global semiconductor chip shortage that has derailed many of its competitors. Early indications are that Tesla has navigated the chip shortages well, with the company reporting earlier this month that it produced 206,421 vehicles in Q2 and delivered 201,250 of those to customers. Nonetheless, the company’s outlook for production moving forward will be a key non-financial metric to monitor.

Separately, analysts will undoubtedly press for information about the Tesla Semi, the company’s commercial electric truck, which has yet to get off the production line. Long-time Tesla executive Jerome Guillen was in charge of the project before leaving to little fanfare last month, so investors fear that the timeline for the vehicle could be further delayed. On a related note, traders should expect new information about the construction of new “Gigafactories” in Austin, Texas (which is anticipated to build the Semi and Cybertruck pickup) and Berlin, Germany.

For more on the history of Tesla Motors and its share price performance, see my colleague Ben Lobel's article on the company's fascinating history.

TSLA stock technical analysis

Turning our attention to the chart, TSLA has underperformed the broader indices and other major automobile manufacturers since peaking near $900 in late January. The stock has spend the last six months consolidating in a $200 sideways range between $560 and $760, and with prices right in the middle of that range ahead of earnings, those support and resistance levels are likely to contain price regardless of the post-earnings move.

Taking a step back, the stock’s 200-day exponential moving average has finally “caught up” with price, providing some support around $600 and keeping the longer-term uptrend intact. That said, a disappointing earnings report could prompt the stock to test that support level and/or the $560 area in time. Meanwhile, a strong earnings report could open the door for a run toward the 6-month highs near $760 as we head through August:

Source: StoneX, TradingView

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

Build your confidence risk free

More from Tech Stocks

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.