Tesla Stock Price Can Hit Levels Above $700 in February

Tesla stock price has surged higher in postmarket trading on the back of the earnings beat for the fourth-quarter results. In a pre-market trading session, shares of Tesla hit a high of $659.95, which is 13.5% higher compared to yesterday’s closing price.

Fundamental analysis: Earnings beat on all fronts

Tesla delivered better-than-expected Q4 earnings yesterday. The electric carmaker reported adjusted earnings of $2.14 per share, compared to analysts estimates of. $1.72 per share. Moreover, the revenue came in at $7.38 billion, again surpassing $7.02 billion expected by market.

Tesla also announced that it has started production of its newest model - Model Y - a crossover SUV, in its California plant. This model will also be produced in the company’s Gigafactory in Berlin, that is yet to be built. 

The company believes it can deliver more than 500,000 vehicles in 2020. Tesla delivered 112,000 vehicles in Q4, to mark the best quarter in its history. Investors are also always focused on margins as Tesla reported a gross margin of 18.8%, beating market expectations of 18.7%.

Technical analysis: A march to the top

The recent surge in Tesla’s stock price has seen the print of an all-time high of $659.95 in post market session on Wednesday. As seen in the graph lower, the stock price surged past the $600 mark easily on the back of the earnings beat.

Technically, not much has changed. Since mid-December, shares of Tesla are trading in uncharted territory. The only target that we can calculate at this moment is a 261.8% extension of the August ‘18 - June ‘19 pullback, which is set at $732.

Interestingly, the highest set target by analysts for Tesla stock is $734.00. Given the positive momentum that surrounds the stock, we can reach that target in the coming weeks if investors continue to buy Tesla stock. 

Shares of Tesla trade around 270% higher compared to June last year. 

Summary

Tesla reported higher-than-expected earnings which facilitated another push higher to hit levels above $650 in after hours trading on Wednesday. The company set a target of more than 500,000 delivered vehicles for 2020. Technically, the price can hit levels above $700 in the coming weeks.