**Long-term Expectation Weakens… Concerns of a ‘Significant Earnings Miss’**
**[Herald Economy = Seo Kyung-won]** “I’m considering closing my short position on Tesla with about a 26% profit. While everyone says the earnings won’t be great, Tesla seems more influenced by Musk’s statements. I might wait and decide later based on market direction. Although it’s double, a 26% profit on a short position sounds good enough…” (An online stock forum on the 23rd)
Ahead of Tesla’s Q3 earnings release, the company’s stock continued to fall for the fourth consecutive day on the 22nd, U.S. time. The excitement surrounding the release of the RoboTaxi has fizzled out, causing the stock to return to levels from about a month ago.
On the New York Stock Exchange that day, Tesla closed at $217.97, down 0.40% from the previous day. During the day, it dipped to $215.26 (↓1.64%) but reduced its losses slightly. Tesla’s stock had taken a steep dive of 8.8% the day after the disappointing RoboTaxi event on the 10th, only to rise slightly for three days before experiencing a four-session losing streak starting on the 17th.
With enthusiasm for the RoboTaxi reveal fading, the stock has returned to its previous levels. The closing price was similar to the $216.27 from September 9th. In terms of market capitalization, it closed at approximately $696.3 billion, down $66.5 billion (about 91.77 trillion KRW) from the $762.8 billion just before the RoboTaxi announcement.
Concerns about Tesla’s short-term earnings outlook have emerged again as the Q3 earnings release approaches, scheduled after the market closes on the 23rd. According to MarketWatch, six out of the last eight reports were followed by a decline in stock prices, with an average fluctuation range of ±10%.
For Tesla’s Q3 earnings, Wall Street estimates compiled by FactSet predict sales of $25.5 billion and earnings per share (EPS) of $0.6. Compared to the same period last year, sales are expected to rise by about 9.2%, while EPS is expected to drop by about 9.1%.
If Tesla’s reported figures fall short of these expectations, investor disappointment could deepen. Additionally, much attention will be given to how Tesla CEO Elon Musk addresses any shortcomings in autonomous driving technology plans during the earnings call, following the criticized RoboTaxi event.
Investors are also keen on Tesla’s plans to launch affordable electric vehicles that could boost short-term profits. Jay Woods, a strategist at Freedom Capital Markets, noted, “Currently, Tesla stock trades more based on actual figures and performance than future prospect expectations. If the announcement results in a bearish trend, the stock could decline back to around $182.”
Gordon Johnson from GLJ Research commented that Tesla’s aggressive capital raising and the reduction in emission credit trading could lead to a “significant earnings miss.”
Contrarily, Dan Ives, an analyst at Wedbush Securities known for his optimistic Tesla outlook, stated, “While many changes are expected in Tesla’s narrative by next year, ultimately, the strength of the Chinese market shown this quarter will become a cornerstone of the bullish Tesla story as AI strategies evolve.”