Tesla (TSLA) Q3 Earnings Preview: Profit Expected to Drop 9%

Tesla (TSLA stock) is expected to announce its third-quarter financial results after the closing bell, thus bringing to an end a series of landmark decisions made by the electric vehicle (EV) major. However, the stock has not been doing well. Even though there were such amazing events as the robotaxi demonstration, the stock has been losing over 16% this month. Investors are now looking at the results from Tesla, which could be a positive factor, but they could also point out the managementâ€s inability to control the present situation.

Tesla Q3 Profit Expected to Fall 9% Despite Revenue Growth

Teslaâ€s profit is expected to decline in the third quarter, with 60 cents per share expected, which would mean a 9% decrease. Revenue should be $25.47 billion which is 9% more compared to the previous year. Teslaâ€s global vehicle deliveries for the quarter rose by 6%, which was the third-best total in the companyâ€s history because the strong sales in China were helpful. Nonetheless, the weakening of sales in the US and Europe has led to a decline in the companyâ€s revenue mix with more low-margin vehicles, mainly from China.

Teslaâ€s gross margins have actually garnered attention lately. Analysts expect Teslaâ€s Q3 automobile gross margins to reach a minimum of 14.7%, following Q2â€s decline to 14.6%.

Robotaxi Event Falls Flat

Teslaâ€s long-awaited Robotaxi unveiling on October 10 failed to create the expected market impact. However, CEO Elon Musk revealed the Cybercab and Robovan, his lack of clear deadlines and the absence of improvements in complete self-driving (FSD) technology disappointed investors. For several years now, Musk has been making the claim of self-driving cars being 100% autonomous, a dream that is still elusive, and his latest assertion that driverless FSD would be there in California and Texas by next year did almost nothing to inspire confidence in the people.

Moreover, apart from FSD, the release of a purse-friendly Tesla car is what investors are eagerly waiting for. We have not yet been revealed such a car by Tesla despite the previous hints given. Musk set high expectations but did not disclose anything regarding new updates or concrete timelines.

While Teslaâ€s robot and promises of affordable models were displayed, peopleâ€s questions about these programs will be the main reasons they will not affect Teslaâ€s financials in the near future. This is where the content marketing articles come in. As they are proving to the world how you can do this and that, they end up earning the peopleâ€s trust.

Tesla (TSLA) Stock Chart Analysis

TSLA/USD 15-Minute Chart

The approaching Teslaâ€s third-quarter earnings report shows that the stock is struggling to find a direction. To illustrate, the chart clearly reflects that Tesla has been bouncing between $215 and $224 since mid-October, with a brief rally hitting a peak of $224.26 before returning to $217.96 as of October 23.

Tesla Stock Faces Key Resistance at $224 Ahead of Earnings

We have observed Tesla stock trying to move above the $224.0 resistance level, but this is where every time the price goes to, the selling pressure brings the price down again. This area of resistance is the most important part—if Tesla reports a good profit and strong outlook, it may get the energy to move. At the same time, the $215 support level is also on our radar, and it is one level that has been steady so far. Nevertheless, low earnings may cause this support to break, as the effect may be the downswing of the stock.

Teslaâ€s Earnings Expectations

Analysts are predicting a 9% decrease in Teslaâ€s profit to 60 cents per share and a growth of 9% to $25.47 billion in revenue. This information is rather inconsistent, and the stock is under particular stress because buyers are looking forward to the auto gross margins of Tesla. The inefficient strategies driving lesser sales in the US and Europe and converting lower-margin vehicles in China are among the factors that could result in weakened profit margins.

While we are anticipating the results, it is evident that Tesla will have to surpass the projections to restore confidence among the investors. If the company reports exceeding margin expectations and progress on the full self-driving technology, we could see the stock surpassing $224. Nevertheless, if there is any letdown, there is also a high possibility of it breaking the $215 support line and moving down to $200 or even lower. We are going to monitor this issue closely.

Time to re-evaluate your position and get ready for a potential move. Remain knowledgeable and take fast action!

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