Tesla’s Earnings Report Causes 7% Drop!
by Ian Harvey
February 13, 2018
Tesla Inc. (NASDAQ:TSLA)
Here is an update of Tesla’s winning options put trade after reporting earnings. This options trade was recommended to “Armchair Trader” Members of Stock Options Made Easy, on Tuesday, February 06, 2018 -- in the article ““Armchair Trader Series” Recommendations - Week Beginning Monday, February 05, 2018”; which produced excellent potential profits of 300% within 48 hours of executing the trade!
YOU NEED TO BE IN TO PROFIT!The Recommendation……
The maker of electric cars Tesla Inc. (NASDAQ:TSLA) is set to report Q4 results after the market close Wednesday, and the consensus is for per-share losses to widen to $3.18 from 69 cents a year ago, with revenue up 45% to $3.3 billion. There are only 3% of analysts that view Tesla as beating earnings expectations.
Consensus estimates are for earnings to decline year-over-year by 761.11% with revenue increasing by 44.44%.
On average, analysts expect that Tesla will report full year earnings of ($8.66) per share for the current financial year, with EPS estimates ranging from ($9.33) to ($8.25). For the next financial year, analysts expect that the firm will report earnings of ($3.87) per share, with EPS estimates ranging from ($8.29) to ($1.04).
Overall earnings estimates have been revised lower since the company's last earnings release.
There's still a lot of uncertainty around Tesla, from its business model to its long-term plans to its giant Gigafactory.
The report comes at a highly important time, namely the production ramp of its Model 3. Tesla has a target to produce 2,500 Model 3 sedans per week sometime in Q1 and 5,000 per week in Q2 after getting off to a slow start last year.
Costs probably spiked because of the expensive ramp-up of production for the Model 3, Tesla's first entry into the mass-market car segment. These struggles could see Tesla booking a non-GAAP loss of as much as $3.70 per share, compared with a $0.69-per-share loss a year ago.
Tesla has had to lower its outlook on this key point twice, and so continued production delays will probably drive reduced sales growth and lower profitability.
** OPTION TRADE: Buy the TSLA FEB 16 2018 310.000 PUT at approximately $5.00.
Tesla's fourth-quarter earnings release failed to garner investor confidence in the company's aggressive growth plans for 2018 and beyond. The stock fell about 7% after its fourth-quarter update in February; which was Tesla’s worst-ever quarterly loss.
Also, shares of the electric-car company took another hit on Friday, falling as much as 6.5%. But the loss improved by the end of the day, with the stock finishing the trading day down 1.5%.
A month-to-date decline for Tesla likely has been fueled by the broader market's decline during this period. The S&P 500 is down 7% month to date, while Tesla stock is down 11%, erasing most of its January gains.
As a growth stock, Tesla shares will likely see significant volatility amid most meaningful swings in the broader stock market.
In 2018, Tesla investors will want to ensure the Model 3 production ramp goes well and that the company begins reporting operating income on a consistent basis .
At the time of the recommendation the share price was approximately $333.25.
On Friday the stock price hit a high of $296.00.
So, for those traders who managed to execute this trade recommended for consideration by Stock Options Made Easy; a nice tidy potential profit of 300% within a 48 hour period.ACTION TO TAKE…….
"YOU NEED TO BE IN IT TO WIN IT!"
Now is the time to decide if it is worth continuing to hold this trade or exit on excellent profits. It is nearly always prudent to exit a trade before an unknown incident occurs that could rattle a sound profit, and this is a fine example of such a situation.
As you would have by now realized, many of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but during earnings season this strategy has been very profitable.
Our approach is to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.
Our proven track record says it all!!
Members of Stock Options Made Easy are provided with an extensive reason as to which direction a stock will move after earnings, followed up by a recommended options trade.
What To Do Now…….
If you interested in being part of this profitable action just click here……