It looks like Tesla's slowdown will continue

Nothing changes moods like price. Since hitting record highs in the summer of 2023, Tesla has seen a decline of 50% and a year-to-date decline of almost 40%. It's safe to say that expectations are low right now, and although that's not the territory the company is in yet Elon Musk could make a breakthrough, it seems like a monumental report.

Profits down, forecasts down

Quarterly earnings are expected to decline, with analysts forecasting $0,46 per share, a decline of 45%. compared to the previous year. Similarly, revenue projections are $22,17 billion, which would represent a decline of 5%. Every year. These downward revisions to earnings estimates over the past month are part of the reason why their share price would need to double to get back to the highest trading price.

In addition to revenue forecasts, analysts closely monitor operating metrics Tesla. Despite the expected decline in overall automotive revenues and total vehicle deliveries, there are positive forecasts for specific segments such as 'Model 3/Y deliveries' and 'deployed warehouses', pointing to areas of potential growth. However, the projected decline in 'Gross Profit - Total Automotive' highlights the importance of assessing profitability alongside revenue data.

Bad news is sometimes good news?

It is worth noting that when expectations are low, sometimes "less bad news" is enough to trigger a recovery. Investors may be eyeing Tesla's potential value ahead of the earnings report, and any signs that things aren't as bad as recently assessed could be enough for bulls to step in or bears to take a breather. However, another report that falls short of expectations and the December 2022 low of $102 could be within reach, which would represent a -75% decline.

Author Sam North, eToro analyst