Can the TESLA tearaway rally continue?

Tesla (TSLA) – If someone bought and held a TSLA before announcing its 3rd quarter results at the end of October 2019 until now, they will receive more than 100% returns in just a quarter. (Although the entire year will grew by 91.27%), which is considered not a bad return.

Tesla’s Q4 earnings report is expected to be announced after the US stock market closed tonight. Based on Zacks investment research, it is expected that the earnings in the 4th quarter will be $ 0.57 per share, compared to $ 0.78 in the same quarter last year. Revenue is expected to be at $ 6.9 billion. However, Estimize estimates an earnings per share at $ 1.81 and Revenue at $ 7.1 billion.

According to Electrek, the automaker company produced and record delivered 112,000 vehicles in the 4th quarter, consisting of 19,450 S / X models and 92,550 models of Model 3, with production figures for the 4th quarter reaching at 104,981. The main markets are still Europe and China.

The interesting part is the production of Model 3, which is the model with the highest production, and also is the only one produced outside US, in Tesla’s Shanghai factory. ITs production started in China in October, so it will be interesting to see if the cost of the Chinese factory will affect the revenue of the 4th quarter or not. Moreover, high delivery numbers do not imply that revenue could beat expectations.

Meanwhile, the company’s financial performance in the past 12 quarters has only yielded 3 positive returns.  Its market value has now risen to $ 100 billion.

In the stock market, the next Resistance level, in case that the earnings report exceeds expectations, is the record high seen on 22 January at $ 595. On the flipside, a downwards movement could find Support at $ 540.

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Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

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