My bet on a Tesla Inc (NASDAQ:TSLA) rebound this month failed to pan out. Apparently, you can’t miss delivery expectations and continue a bull run, no matter what the analysts say. As a result, TSLA stock breached support at $350 in September, and has spent the ensuing sessions struggling to come back.
This month, we have TSLA earnings on tap. Tesla has yet to announce an official date, but the report should hit the Street sometime near Oct. 25.
Wall Street is currently expecting a loss of $2.15 per share for the quarter, down massively from a profit of 71 cents per share in the same quarter last year — a byproduct of Tesla’s heavy spending to churn out Model 3’s.
Revenue, meanwhile, is expected to rise 27.8% to $2.94 billion.
In the past, TSLA earnings haven’t held as much weight as delivery projections. This is especially true when it comes to the Model 3. In recent Tesla news, the company said it only delivered 220 Model 3s, whiffing expectations and casting doubt on Tesla’s claims that it will hit a production volume of 5,000 Model 3s per week by the end of 2017.
The company blamed the shortfall on “production bottlenecks,” which seemed to placate some TSLA bulls for the time being. However, unless Tesla addresses those concerns in this month’s quarterly earnings report, patience might begin to wear thin.
The ironic development to this situation is that sentiment is actually starting to turn higher. Tesla stock predictions are trending toward the higher end compared to earlier in the year. For example, Thomson/First Call reports that eight of the 22 analysts following TSLA now rate the shares a “buy” or better, up from just six “buys” back in July.
Furthermore, short sellers abandoned TSLA stock in the most recent reporting period, with short interest down 10%. However, some 27 million Tesla shares remain sold short, accounting for 22.6% of the stock’s total float.