After a difficult month, Tesla (NASDAQ:TSLA) stock is finally back in the green today, closing up by 2%. Although this performance is partially due to positive market momentum, the company is gearing up for an important catalyst. Specifically, the electric vehicle (EV) leader will post third-quarter earnings after markets close on Oct. 19.
Tesla has plenty riding on these financial results. Over the past month, TSLA stock has been on a gradual downward trajectory, shedding almost 30%. Some investors are approaching upcoming earnings with caution; shares slumped earlier this month when the company failed to meet expectations for Q3 deliveries. Still, there are multiple reasons to expect a positive catalyst next week.
Let’s take a closer look at what investors can expect from the upcoming results.
What This Means for TSLA Stock
Investors may remember all too well that, heading into October, some experts were predicting that Tesla would report record Q3 deliveries. One month later, TSLA stock is still trying to recover from the volatility it saw after coming in below expectations. In a statement announcing the upcoming earnings call, however, the company emphasized that recent deliveries “should not be relied on as an indicator of quarterly financial results.”
Even before reporting Q3 deliveries, Tesla has been working hard to raise expectations for Q4 and the year ahead. In late September, it issued an upbeat forecast projecting significant growth through the end of 2022 and throughout 2023. Future plans center around increased global production of the company’s most popular models. According to Reuters, meeting these predictions could push Tesla closer to the production scale of German rival BMW (OTCMKTS:BMWYY). That’s convenient, given that Tesla’s global push includes increased production at Giga Berlin.
Some experts remain highly bullish on TSLA stock, predicting a record report. Market insight platform Trefis offers the following forecast:
“We expect Tesla’s revenues to come in at all-time quarterly highs of $22.3 billion, rising by about 62% versus last year and by about 32% sequentially. Earnings are likely to come in at about $1.03 per share, up from about $0.76 in Q2 and about $0.62 in the year-ago quarter.”
Of course, not all experts are so optimistic. But TSLA stock does retain a moderate buy consensus on TipRanks; 19 out of 31 analysts rate it as a “buy.” UBS analyst Patrick Hummel also recently stated that, although he lowered his price target, Tesla is the best-positioned EV maker to “use pricing as the tool to fill its factories.” Hummel also issued a “sell” rating for competitor Ford (NYSE:F). These kinds of predictions set Tesla up for positive momentum heading into earnings.
What Comes Next
Investors have learned not to rely too heavily on record predictions for Tesla. However, that doesn’t mean the EV leader won’t deliver impressive results. Regardless of what the financial results show, anticipation is high as Wall Street prepares for an earnings season packed with key reports.
Until Oct. 19, at least, the current momentum should keep TSLA stock elevated. Even if Tesla doesn’t set any records with the report, meeting expectations should help shares rise as well.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
