We Consider Adding Tesla Stock to the Watchlist as Sales Surge in China

News out of China Tuesday morning sent Tesla stock (TSLA) higher; sales surged as the EV maker cut prices for its popular models. Until recently, many media outlets had a negative spin on the price cuts.

Tesla Stock 

• Earnings are growing despite price cuts, price discount to sales of 4.91x of 17x is quite compelling.
• Operating earnings are also trading at a discount at 32x versus 56x.
• Earnings growth rate over the past 5 years is an outstanding 56.30% per year.  That renders a Tesla stock price of $227.00. Finally, if we consider
• EBITDA at 21x versus 127 normally, we have a share price North of $664.00 (+/-).
• Free cash flow (FCF) is a small premium.

These are just some of the reasons we are considering Tesla stock (TSLA) for day trades over the next few sessions. Earnings are scheduled for next week on January 25.

Tesla stock (TSLA) has been trading above average volume over the past two weeks. In addition, the $100.00 level held. Price action cleared the 21-day moving average, still well below the 50-day moving average at $159.40.

We’re anticipating price action can get above its weekly 10ema at $149.80 after earnings are reported. That would be key for the longer term trend.

Tesla (TSLA) reported 3rd Quarter September 2022 earnings of $1.09 per share on revenue of $21.5 billion.

The consensus earnings estimate was $1.01 per share on revenue of $22.5 billion.

Revenue grew 55.9% on a year-over-year basis.

Click to enlarge chart.

Tesla (TSLA) is coming out of a base at bear-market lows, while surging 7.4% Tuesday and closing at $131.49. Tesla China EV registrations bounced in the latest week following recent big price cuts there. TSLA stock is up +4.81 points this morning in early trading.

Tesla Stock – 60 Minute Chart

Price action cleared recent pivots as shorts cover and new buyers accumulate shares. The trend break to start a new week of trading is noteworthy.

Wall Street analysts were mixed on the impact of Tesla’s (TSLA) price cuts in the U.S. Management has made an effort to have more vehicles qualify for Inflation Reduction Act tax credits as base prices for the Model Y and Model 3 in the U.S. are now below the required MSRP thresholds.

Shares of Tesla traded as high as $136.15 this morning , marking a new 2023 high. 

Join us today in the trading room for our LIVE broadcast during market hours, as we navigate the current environment. Watch, listen, and trade from 9:20 AM to 4:15 PM Monday through Friday.

Happy Trading, 

Vinny

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