Tesla share price: what’s the latest ahead of its Q4 results?

We examine 4 key things investors and traders should know before Tesla's fourth quarter earnings release.

When will Tesla report its Q4 results?

Tesla (TSLA) is set to report their fourth quarter, FY19 financial results on January 29 – after the market close.

Fundamentals in focus

To ignore Telsa’s improving fundamentals would be disingenuous.

Even so, many commentators – while acknowledging the company’s ability to generate top-line growth, have been less convinced about the company’s capacity to turn a profit.

Yet Telsa did just that in the third quarter, where the company reported earnings per share (EPS) — on an adjusted basis — of US$1.86 per share.

Analysts were previously expecting Tesla to report a loss of 42 cents per share.

This turn to profitability was itself bolstered by good top-line growth – with Tesla reporting Q3 revenue figures of US$6.3 billion.

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Adding to those positive fundamentals, the market already has some idea of the automaker’s performance in the last quarter, with Tesla reporting their Q4 production results to the market in early-January.

As part of that release, the company noted that it had produced 104,891 cars and delivered 112,000 vehicles during Q4. According to the website Road Show, this was well ahead of Wall Street estimates.

Production figures aside, questions still remain over the controversial and volatile automaker: will Tesla’s fundamentals hold up? Will Tesla report adequate growth to sustain its now-elevated valuation? Or maybe more importantly (and depending on who you ask); will Tesla report another quarter of profit, or was Q3 FY19 just an anomaly?

The average analyst consensus may suggest that Q3 was no anomaly, mind you. According to Bloomberg Data, analysts are currently expecting Tesla (TSLA) to report Q4 revenues of US$7.052 billion, against earnings per share (EPS) of US$1.779.

Tesla share price: momentum in focus

Those who have doubted Tesla have seen their investment thesis significantly disrupted in the last few months.

From a low of $US178 per share in June 2019, the Tesla share price has now skyrocketed more than 200%.

At the close of yesterday’s session, Tesla’s stock traded at US$558 per share.

This near-miraculous reversal has not only seen Tesla’s market capitalisation run past the US$100 billion mark – but it’s also seen a raft of hedge funds and speculators get burnt along the way. The analytics firm S3 Partners, for example, recently estimated that short sellers have lost ~US$8.4 billion betting against Tesla and the company’s celebrity-CEO Elon Musk, notes CNN.

Whether short-sellers will see a reversal in their fortunes however is anyone’s guess. For now, it looks as if the Tesla bears continue to cling to their positions, with a recent Business Insider article suggesting that ‘many are still holding onto their short positions’.

The analyst take

Even as Tesla’s share price runs to all-time-highs – analysts remain mixed on how much room the stock has left to rise – or potentially fall.

For instance, New Street Research analyst, Pierre Ferragu, currently has a US$800 per share price target on the automaker. Even at now-elevated and current share price levels that would imply potential upside of around 40%.

Longer-term, should Tesla be able to maintain its strong operational momentum, Ferragu sees further (and significant) share price upside.

‘We estimated that by 2025, Tesla could produce and sell 2 to 3 million cars, like other premium brands and in line with BMW today,’ Ferragu notes, according to Barrons.

On that bold and bullish estimate, Ferragu sees Tesla’s stock trading around the US$1,100 to US$1,700 range, in 2025.

Though a bold prediction: the average analyst outlook overall is more moderate. According to the Wall Street Journal: Tesla (TSLA) is rated a ‘hold’ on average, with nine analysts rating it a buy, 11 a hold, two underweight and 11 a sell.

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