Tesla stock price forecast for Q4 2021 ahead of Q3 results
- Tesla shares advanced 7% last week after announcing strong EV sales in China.
- Analysts expect significant EPS and revenue growth when TSLA reports its fiscal Q3 results on Wednesday.
- The stock trades at steep valuation multiples after surging nearly 50% since 19th May.
Tesla Inc. (NASDAQ:TSLA) will announce its fiscal Q3 results on Wednesday after the market closes, with analysts expecting the automaker to report strong quarterly earnings and sales growth.
Goldman Sachs analyst recently wrote a note to investors saying he expects the company’s strong sales to fully offset drawbacks from chip shortage and increased freight and commodity costs.
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China will play a crucial part in Tesla’s Q3 sales after the EV maker announced more than 56,000 EV sales in the country for September. The company had announced more than 241,000 global EV sales for Q3 earlier this month.
Is it time to buy Tesla shares?
From an investment perspective, Tesla shares trade at steep trailing 12-month and Forward P/E ratios of 440.92 and 115.42, respectively. Therefore, value investors may opt for alternative automakers in the market with Ford Motor Co. (NYSE:F) and General Motors Co. (NYSE:GM) trading at more lucrative valuation multiples.
However, with analysts expecting Tesla’s earnings per share to grow by 165% this year before rising at an average annual rate of 51% over the next five years, Elon Musk’s car company offers more exciting growth prospects.
As a result, it could gain the attention of growth investors willing to overlook its steep valuation multiples.
Technically, Tesla shares seem to be trading within an ascending channel formation in the intraday chart. The stock recently spiked to overbought conditions of the 14-day RSI, moving closer to the trendline resistance. As a result, a pullback could be imminent.
However, with the company expected to report strong fiscal Q3 results on Wednesday, the current bull run could continue for the foreseeable future.
Therefore, investors could target extended gains at about $896.37, or higher at $944.54, while $799.36 and $750.17 are crucial support zones.
Time to buy the pre-earnings rally?
In summary, although Tesla shares are up nearly 50% since the 19th of May, the stock still offers exciting growth prospects, backed by its most recent sales reports.
Therefore, although the stock has surged to overbought conditions, the prospect of a market-beating FQ3 report could drive the price higher.