Electric vehicle behemoth Tesla (TSLA) reports earnings Wednesday (10/21) after the closing bell.  Headed into earnings, the stock has been consolidating since the end of August with highs roughly around $460 and some higher lows near the stock’s 50-DMA.

On Wednesday afternoon, the company is expected to report a fifth consecutive quarter of profit with EPS of $0.59.  Frankly, that is lower earnings than those past four quarters but would mark another quarter in the black nonetheless.  Fortunately for TSLA, Q3 earnings by multiple measures have tended to be the strongest quarter of the year for the stock.  As shown in the screenshot of our Earnings Explorer below, Q3 for TSLA has seen its strongest EPS beat rate of 80%.  Sales beat rates are a bit weaker at 60%.  Despite this, Q3 earnings have been by far the best for TSLA in terms of share-price reaction to the news.  Not only has TSLA traded higher 80% of the time on Q3 earnings days (compared to 53% for all earnings days), but its average gap up, open to close, and full-day performance are stronger than any other quarter.  Throughout its history as a public company, TSLA has averaged a one-day gain of 6.32% in reaction to its Q3 earnings report.  No other quarter has seen the stock even average a gain of 1%+.

While TSLA has the tailwind of seasonal strength with recent quarters having seen strong results, the past year’s reaction to earnings have been pretty mixed.  On its past two earnings reports, TSLA gapped up more than 5% at the open each time only to erase all of those gains intraday to close lower.  In the two quarters prior to that, the stock rallied double digits on earnings.  Last October when TSLA reported after the close on 10/23/19, the stock gained 17.67% in reaction to the news the following day.  Start a two-week free trial to Bespoke Institutional to use our extremely useful Earnings Explorer tool today!


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