Tesla Inc is on a ‘knife’s edge’ heading into the Q2 report: Analyst

By:
on Jul 20, 2022
  • Tesla is scheduled to report its fiscal second quarter results on Wednesday.
  • Carter Worth warns the stock might break to the downside post earnings.
  • The EV manufacturer's guidance will likely set the direction for the stock.

Tesla Inc (NASDAQ: TSLA) is on a “knife’s edge” ahead of its Q2 results scheduled for Wednesday after the bell, says Carter Worth – one of the top three technical analysts at Wall Street.

Tesla stock could break to the downside after earnings

The electric cars manufacturer has been range bound ($600 to $800) since May 10th. But the Founder and CEO of Worth Charting is convinced the stock will pick a direction after the earnings. On CNBC’s “Fast Money”, he said:

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I’d call this high volatility low variants. It’s near perfect equilibrium; bears and bulls balanced evenly. Tesla will say something in its earnings that people will generally hate or like enough to move it substantially higher or lower.

Worth sees a bigger probability of a break to the downside, though. During the quarter, CEO Elon Musk said the giga factories in Texas and Berlin were losing “insane money”. So, investors will look for an update on that as well tomorrow.

Could Tesla Inc stick to its outlook for deliveries?

Experts forecast Tesla to earn $1.83 a share this quarter on $16.88 billion in revenue. The EV company has already confirmed that it delivered less-than-expected vehicles in Q2.

More important, however, will be the guidance. Shares may just be rewarded if the automaker reiterated its outlook for up to 1.50 million deliveries this year that represents a compound annual growth rate of 50%.

On the plus side, Tesla recently said that it will double its electric cars in Australia by the end of 2022. Wall Street currently rates the stock at “overweight” and sees upside to $906 on average.

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