The electric vehicle maker reported earnings after the bell that underwhelmed Wall Street. Now, technical analysts are saying it’s set to open below a key level. Let’s take a look. 👀
Starting with its third-quarter results, the company’s adjusted earnings of $0.66 on revenues of $23.35 billion missed the $0.73 and $24.1 billion expected. It marked the first time since Q2 2019 that it missed on both the top and bottom lines.
Quarterly revenue growth has stagnated over the last year, primarily driven by increasing competition and high monthly payments for new buyers. 🐌
CEO Elon Musk said he’s worried about the high-interest rate environment and emphasized the need for Tesla to get the cost of its vehicles down. He also acknowledged shareholder demands that the company advertise more aggressively to stoke demand. But he pushed back, saying it doesn’t help to tell people about cars they cannot afford. He reiterated the primary focus is bringing costs down to a level where mass-market adoption can occur.
Operating margins fell from 17.2% last year to 7.6% this quarter, dropping another 200 bps QoQ. A jump in operating expenses was primarily driven by Cybertruck, AI, and other research and development (R&D) projects. Meanwhile, it saw a reduced average selling price (ASP) of its vehicles due to price declines and product mix. 🔻
Overall, investors remain focused on the company’s ability to continue producing free cash flow while also investing in future growth drivers. The competitive landscape and challenging consumer environment are making that more difficult than the company anticipated.
As for the stock price, it’s currently down just over 3% after the bell. However, technical analysts are watching this long-term chart showing prices breaking down below support that’s been intact since May. They suggest that the move coming after several failed breakout attempts indicates that buyers are exhausted, and sellers have taken control. 😬
As always, we’ll have to wait and see how $TSLA shares react in the coming days. 🤷