Here's What Traders Anticipate for Tesla Stock Movement Following This Week's Earnings

Main Points

• Tesla is scheduled to announce its fourth-quarter earnings after markets close on Wednesday, with both revenue and profit anticipated to be lower than the previous year.

• Options market data indicates that investors are bracing for Tesla shares to fluctuate by roughly 5% in either direction by week's end.

Tesla will unveil its latest quarterly financial performance after Wednesday’s market close, and many traders are expecting significant movement in the company’s stock price once the results are released.

Based on current options pricing, investors are preparing for Tesla (TSLA) shares to swing about 5% up or down by the end of the week. With Monday’s closing price near $435, this could mean a rise to $459—still about 6% below December’s peak—or a drop to $412.

During the upcoming earnings call, shareholders will be paying close attention to CEO Elon Musk for updates on Tesla’s progress in autonomous driving and robotics. Musk has previously indicated that these areas could eventually become Tesla’s primary sources of income as electric vehicle sales face increasing challenges. At the World Economic Forum last week, Musk mentioned that Tesla may begin offering its Optimus humanoid robots to consumers as early as next year.

Investor Implications

Despite a decline in vehicle deliveries, Tesla’s stock has recently reached all-time highs. This surge is largely driven by optimism surrounding the company’s advancements in artificial intelligence, autonomous vehicles, and robotics.

Sales of the Optimus robot and subscriptions to Tesla’s Full Self-Driving (FSD) software are among the key performance indicators that must grow for Musk to unlock additional stock awards under his latest compensation plan. Earlier this month, Musk revealed that starting next month, FSD will only be available via subscription, a move that could boost Tesla’s recurring revenue.

Additionally, Tesla has recently announced the removal of human safety operators from the front seats of some robotaxis in Austin. Analysts at Morgan Stanley believe this could represent a significant step forward for Tesla’s autonomous taxi ambitions.

For the fourth quarter, analysts expect Tesla to report $25.1 billion in revenue—a decrease of about 2.4% compared to the same period last year. Adjusted earnings per share are projected at $0.46, down from $0.60 a year ago, according to Visible Alpha estimates.

Analyst opinions on Tesla remain mixed. Out of 11 analysts tracked by Visible Alpha, six rate the stock as a “buy,” three recommend holding, and two suggest selling. Their consensus price target is approximately $446, which is just 2% higher than Monday’s closing price.