As automakers release Q2 sales data, is it time to buy Tesla shares?

By:
on Jul 2, 2021
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  • Tesla releases quarterly sales data within the first three days of the new quarter.
  • Analysts are optimistic ahead of its Q2 sales data with expectations of massive Y/Y growth.
  • The company smashed expectations in Q1. So, should you buy TSLA shares ahead of sales data?

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Tesla Inc. (NASDAQ:TSLA) will release data for Q2 sales on Friday in line with its tradition of releasing within the first three days of the new quarter. In Q1, the company smashed analyst expectations after EV sales grew more than 106% Y/Y. The company’s goal is to maintain approximately 50% Y/Y sales growth for the foreseeable future.

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Analysts are optimistic that Tesla will deliver another outstanding quarterly sales data for Q2. However, despite a substantial increase in EV deliveries, competition from legacy automakers is putting EV company stock prices under pressure. For example, Lordstown Motors Corp (NASDAQ:RIDE), Workhorse Group Inc. (NASDAQ:WKHS), and GreenPower Motor Company Inc. (CVE:GPV) shares all plunged on Thursday after Nissan Leaf and Chevy Bolt; both reported strong EV sales for the first half of the year.

Is Tesla stock a buy in July?

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Competition in the EV industry is rising, and Tesla will find it more difficult to continue meeting sales targets in the coming years. In addition, legacy automobile manufacturers are also gaining traction in the EV business based on recent sales data.

However, it will all come down to specialization and expertise in making electric vehicles. In this respect, Tesla has a competitive edge. If Tesla outperforms expectations on Q2 EV sales, shares could spike again.

The stock looks steeply priced at a P/E ratio of 683.39, but it also has strong earnings growth expectations of 165% this year. Therefore, there is a lot of excitement despite the premium valuation.

Source – TradingView

Technical overview: why invest in Tesla shares in Q3 2021?

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Tesla’s near-term prospects look exciting based on recent performances. If the company delivers another robust sales data for Q2, the current bull run will likely continue. As a result, the TSLA stock price could break above the triangle formation and head into overbought conditions before pulling back.

Therefore, investors could target profits at approximately $751.33 or higher at $$820.91 for extended gains. The key support levels are $605.46 in the event of a sharp pullback and $538.68 for extended declines.

Bottom line: the catalyst for buying Tesla shares now

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In summary, although TSLA stock looks steply valued at a P/E ratio of 683.39, the company’s prospect of another impressive quarterly sales data could drive the stock price higher in the short term. 

Furthermore, Tesla is still the dominant force in the EV industry. The company targets expansion opportunities in the EU and Asian markets that could be accretive in the long term.

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