What’s Driving Tesla’s Roller-Coaster Ride after Q4 Results?



Tesla’s Q4 2018 earnings

Tesla (TSLA) released its fourth quarter of 2018 results after the market closed on January 30. The company’s adjusted earnings for the quarter were at $1.93 per share on a non-GAAP (generally accepted accounting principles) basis, a 33.4% drop from $2.90 in the third quarter and also worse than analysts’ estimates of $2.20 per share. The company’s fourth-quarter GAAP earnings were at $0.78 per share as compared to $1.75 in the previous quarter.

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Tesla’s roller coaster ride

On Wednesday after Tesla announced its fourth-quarter results, its stock settled with gains of 3.8% ahead of its earnings event. After the announcement, the stock (XLY) extended these gains initially after hours despite its earnings miss. The company’s better-than-estimated revenues and its strong Model 3 gross margin could be some of the main reasons for these initial gains. However, these gains didn’t last for long, as its stock fell by 4.5% in extended trading after the company’s CEO Elon Musk announced the departure of Tesla’s CFO Deepak Ahuja.

Tesla stock ended January 2019 with 7.7% losses against 7.9% and 9.7% gains in the S&P 500 Index and the NASDAQ Composite index (QQQ). Interestingly, in January Tesla’s Chinese (MCHI) competitor NIO (NIO) outperformed the market with solid 23.7% gains.

Series overview

In this series, we’ll take a close look at Tesla’s fourth-quarter results including its revenue and gross margin. We’ll find out what factors drove the company’s fourth-quarter results. We’ll also review Tesla’s updates on Model 3 gross margin and its outlook for 2019. At the end of the series, we’ll take a look at what analysts recommended on Tesla stock and explore some important factors that could affect its valuation in the near term.


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