$Tesla (TSLA.US)$The stock price continued to fall on Tuesday after closing below an important support level on Monday, April 15. As the company's first-quarter results report approaches, recent stock price changes have left investors wondering where the company's stock price will go.
Tesla shares closed at $157.11 on Tuesday, down 2.7%, while the S&P 500 Index and the Nasdaq Composite Index fell 0.2% and 0.1%, respectively. Tesla's stock price has never fallen below $160 since May 2023. Earlier, there was news that Tesla would lay off more than 10% of its more than 140,000 employees.
After Tuesday's stock price drop, Tesla's stock price so far this year has dropped by about 37%. Currently, the electric car maker's stock price is about 44 times its projected earnings per share in 2025. At the beginning of this year, it had a price-earnings ratio of about 65 times, according to FactSet.
As of press time, Tesla was down 1.24% in early trading on April 17.
Monday's decline caused Tesla to fall below the so-called technical support level, which is 164 dollars per share. When the price breaks through the support level, that is, the price that investors have been willing to buy in the past, investors will be asked to find the next level where the decline may stop. Fairlead Strategies co-founder Katie Stockton (Katie Stockton) said that $148 represents the next support level.
Stockton and other technical analysts won't make fundamental judgments about stocks. They study price charts to figure out how stocks are moving in the short and medium term. Technical analysts like Stockton use moving averages, percentages of previous earnings, and other data metrics to calculate the next move for a particular stock.
The share price is likely to drift towards the $148 level, but no major event will change investors' sentiment. For better or for worse, income is one factor that could change the situation.
Tesla is scheduled to announce first-quarter results after the market closes on April 23. The company's CEO, Elon Musk (Elon Musk), may once again guarantee that sales will resume growth, thereby boosting the share price.
In the first quarter of 2024, Tesla delivered about 387,000 cars, down nearly 9% year over year, and about 20,000 fewer than Wall Street's lowest estimate. This mistake caused Wall Street analysts to lower delivery expectations for 2024 to around 1.8 million vehicles, which is the same as in 2023.
“I hope (Musk) can use (profit margins) to light a candle of hope... keep a ray of light,” said George Gianarikas (George Gianarikas), a Canaccord agreement analyst.
Lower deliveries and lower electric vehicle prices have weighed down profit margins. According to FactSet's data, Wall Street expects the operating margin for the first quarter to be around 6%, down from 11% in the first quarter of 2023 and 19% in the first quarter of 2022.
“People need hope,” Jana Rikas added, rating Tesla stock as a “buy” with a target price of $234.
Edit/Jeffrey