$Tesla Motors(TSLA)$ Tesla Earnings: Bottom Out for a Rebound or Plunge into Freefall?

Are Analysts Too Pessimistic About Tesla Earnings? Or Does the Sales Plunge Mean Tesla Will Have Another Plunge?

Tesla’s Q1 2025 earnings, announced on April 22, 2025, come at a critical juncture. The stock has already lost 40% year-to-date (YTD), reflecting weakening EV demand, production challenges, and broader market volatility (e.g., S&P 500 at 5,114.92 on April 21, 2025). Analysts projecting declining revenue and EPS suggest Tesla is facing significant headwinds, including competition in the EV space, reduced consumer spending due to tariffs (household losses of $4,900 as per Yale Budget Lab, April 15, 2025), and supply chain issues exacerbated by U.S.-China trade tensions.

However, last April’s 14% jump post-earnings indicates Tesla can still surprise to the upside if it delivers positive news, such as progress on cost-cutting, new product launches (e.g., Cybercab), or better-than-expected delivery numbers. Analysts might be overly pessimistic if Tesla demonstrates resilience in its core markets or signals a recovery in demand. On the other hand, if the sales plunge continues—potentially due to macroeconomic pressures or operational missteps—another significant drop in the stock price is possible.

How Do You Expect Tesla Earnings?

I expect Tesla’s Q1 2025 earnings to miss analyst expectations on revenue and EPS, aligning with the projected declines due to weakening EV demand. However, Tesla has a history of providing forward-looking guidance that can spark investor optimism. If Tesla can highlight progress in its Full Self-Driving (FSD) technology, cost reductions, or a strong delivery outlook for Q2, the market might overlook the short-term misses. Without such catalysts, the stock risks further downside.

What’s Your Target Price for Tesla?

Given the 40% YTD decline, Tesla’s stock is likely trading at a lower valuation than earlier in the year, but exact price levels aren’t provided in the post. Assuming a rough estimate based on historical data, Tesla might be trading around $150-$170 after the 40% drop (from a hypothetical $250-$280 at the start of 2025). My target price depends on the earnings outcome:

• Bull Case (Rebound): If Tesla beats expectations or provides strong guidance, the stock could rebound to $200-$220 in the next 3-6 months, driven by renewed investor confidence.

• Bear Case (Freefall): If earnings disappoint and no positive catalysts emerge, Tesla could drop to $120-$130, reflecting continued sales weakness and market pressure.

Short-Term Strategy (1-3 Months): I’d wait for the earnings release on April 22, 2025, before taking a position. If the stock dips post-earnings to $130-$140, it could be a buying opportunity for a potential rebound. If it rallies above $180 on strong earnings, consider a partial entry with a stop-loss to manage risk.

Recommendation: Analysts may not be too pessimistic given the macro challenges, but Tesla’s ability to surprise makes a rebound possible. I lean toward a cautious approach—wait for a dip to $130-$140 to buy, with a target of $200 in a rebound scenario.