Tesla logo near a car dealer. Tesla, Inc. is an American company that specializes in electric automotives, energy storage and solar panel manufacturing. Image source: ©Joerg Huettenhoelscher © 123RF.com
Tesla's earnings in the first quarter exceeded all initial expectations, despite difficult prospects for growth owing to the coronavirus fallout. The company posted earnings per share of $0.93, thereby exceeding the initially projected EPS of $0.43. This represents the most robust performance to date.
Additionally, Tesla posted record-breaking net sales of $438 billion and revenue of $10.39 billion. This is due to the exceptionally high demand for Model S/X and the newer 3/Y. A total of 180,338 cars were produced alongside combined deliveries of 184,800 units.
Tesla q/q EPS. Image source: TradingEconomics.com
Tesla's solid performance over the first three months of 2021 is also owing to the fact that it managed to reduce its operational costs considerably, which is increasing the company's overall operational efficiency:
"Reducing the average cost of the vehicles we produce is essential to our mission. In 2017, as we began production of Model 3, our average cost per vehicle across the fleet was ~$84,000. Due to the launch of new products and new factories and the reduced mix of Model S and Model X, our average cost declined to sub-$38,000 per vehicle in Q1."
Despite these promising earnings numbers for Q1, Tesla's shares are falling in the pre-market session. TSLA closed yesterday at 738.20 but is currently trading at around 719.00, which measures a drop of 2.57 per cent.
As can be seen on the 4H chart below, the underlying price action is still contained within the boundaries of an Ascending Wedge pattern, which means that there is more room for appreciation. The stock could attempt to test the next major resistance level - the psychologically significant barrier at 800.00.
However, the Ascending Wedge is a type of pattern that typically signifies potential bearish reversals, which means that the underlying bullish momentum could be running on fumes.
Even still, the pre-market drop is likely to consolidate around 720.00 before the uptrend can be resumed because of the significance of the 23.6 per cent Fibonacci retracement level around the psychological support at 700.00, which is currently converging with the 50-day MA (in green) and the 100-day MA (in blue). The price is unlikely to break down lower at the present rate.
TSLA 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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