Tesla is set to release its first-quarter earnings on Wednesday, with investors interested in the impact of recent price cuts on margins and demand for the company's electric vehicles. Analysts predict adjusted earnings of 86 cents a share and sales of $23.8 billion for the quarter.
The recent price cuts are a potential headwind for margins, but the company's superior cost structure and industrywide affordability concerns make them less problematic for Tesla.
Despite recent stock declines, some analysts believe Tesla will be able to maintain industry-leading operating margins and weather economic headwinds. The U.S. Environmental Protection Agency recently announced new rules to boost EV adoption, which could benefit Tesla due to its manufacturing capabilities. Tesla is scheduled to host a question-and-answer webcast to discuss the earnings report and outlook after the release.
Tesla has challenged is 30-week EMA but has not been able to overcome it (green rectangle). Its weekly RSI is oscillating around the 50 area (blue rectangle) as price remains range bound between 165-215.
- Bullish scenario: price moves above 30-week EMA and EMA turns up. RSI trades above the 50 level.
- Bearish scenario: price moves below 30-week EMA and EMA turns down. RSI trades below the 50 level.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.