Can Earnings Help Tesla Stock Back Towards Record Highs?

The equity is sitting just shy of its January all-time high

Deputy Editor
Oct 20, 2021 at 1:06 PM
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Tesla Inc (NASDAQ:TSLA) is gearing up for its third-quarter earnings report, slated for release after the close today. The electric vehicle giant was last seen up 0.3% to trade at $866.93, as anticipation builds ahead of the event. Below, we will take a deeper dive into how the security has performed on the charts of late, and explore some of its past post-earnings activity. 

The equity has been trending higher over the last few months, bouncing off the $540 level in mid-May to come within striking distance of its Jan. 25 all-time high of $900.40. After putting pressure on the shares during its two largest pullbacks this year, the 120-day moving average has helped guide TSLA higher, as it tacked on 32.2% over the last three months. Year-over-year, the security is up 105.3%. 

TSLA Chart October 20

Regarding the security's post-earnings history, Tesla stock has moved into the red the day after reporting in five of the last eight quarters. Options traders are pricing in a 5.6% post-earnings swing for TSLA this time, which is only slightly smaller than the 5.7% move the stock average over the past two years, regardless of direction.

The brokerage bunch is bearish towards Tesla stock, indicating there is plenty of room for upgrades, should the company deliver upbeat financial results. Of the 22 analysts in question, 12 carry a tepid "hold' or worse rating, while 10 say "buy" or better. Meanwhile, the 12-month consensus target price of $705.71 is an 18.5% discount to current levels.

Now seems like a great opportunity to speculate on TSLA's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 37% stands in the 7th percentile of readings from the past year, indicating options players are pricing in low volatility expectations at the moment. Plus, the stock's Schaeffer's Volatility Scorecard (SVS) sits at a high 83 out of 100, indicating it has exceeded options traders' volatility expectations in the past year -- a boon for buyers.


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