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Takeaways
- Tesla is expected to report first-quarter results after the close of markets on Tuesday. Options pricing suggests traders expect its shares to move dramatically.
- Tesla shares have moved an average of 12.3% post-earnings over the last four quarters.
- Slowing EV sales and CEO Elon Musk's controversial work with President Trump have weighed on shares, which have lost about half their value since hitting an all-time high in December.
Tesla will report its first-quarter results at the close of business on Tuesday. Investors are bracing themselves for another big stock move after earnings in the EV maker’s shares.
Options pricing suggests traders anticipate Tesla (TSLA), stock to move in either direction by approximately 9.3% within days of its announcement. Tesla stock could move by that much, putting it in the range of $263.82 – $218.92. It closed on Thursday around $241.
Tesla has historically been among the most volatile stocks in the S&P 500 around earnings releases. In the last four quarters, the stock has moved an average of 12.3% the day after earnings were reported. The range of post-earnings moves is wide—shares jumped nearly 22% after reporting last October and slumped more than 12% in the prior quarter.
Investors are facing a season of earnings rife with uncertainty. President Trump has suspended most of the tariffs announced earlier this week, but has still left in place massive duties for Chinese goods. He has also made contradictory comments about being open to exemptions. The economy has been strong, but economists warn that tariffs are bound to have an impact.
According to JPMorgan analysts the options market is pricing some of the largest implied average moves around earnings since first quarter 2020.
Tesla sales have dropped around the world due to consumer backlash over CEO Elon’s verbal support and financial backing of international far right movements. Analysts and investors have expressed concern that Musk’s involvement with the White House distracts him from leading his businesses. Tesla’s access is foreign markets could become a bargaining tool for other countries when negotiating trade agreements with Trump.
Tesla’s shares almost doubled within a month and a quarter after Trump’s re-election, with Musk’s support. They have since fallen about 50%, putting the shares back to where they used to be before Election Day.
Investors will be on the lookout for any positive updates regarding artificial intelligence (AI), which is seen as Tesla’s next growth driver. Musk could confirm this week that Tesla’s first commercial robotaxi network will launch in Austin, Texas this June. Musk may also discuss the plans of Tesla to commercialize Optimus, its humanoid robotic robot.
