To The Moon

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It’s April 18, 2025, at 8:49 PM PDT, and the market is abuzz with anticipation as Tesla (TSLA) gears up to announce its Q1 2025 earnings on April 22 after market close. Last April, Tesla’s stock surged 14% during earnings week, fueled by optimism over affordable EV production timelines. But this year, the electric vehicle giant faces stiff headwinds: a 13% sales plunge, weakening EV demand, production challenges, and a stock that’s down 40% year-to-date, trading around $214. Analysts are projecting a tough quarter with revenue of $21.81 billion and EPS of $0.43—a sequential drop from Q4 2024’s $27.2 billion and $0.74 EPS. Are analysts too pessimistic, or is Tesla headed for another plunge below $200? Let’s dive in with a precise, insightful, current, and knowledgeable analysis to unpack the earnings outlook, market sentiment, and trading potential.

Tesla’s Q1 2025: The Stakes Are High

Tesla’s upcoming earnings come at a critical juncture. The company has been battered by a mix of internal and external pressures:

• Sales Slump: Tesla reported a 13% year-over-year drop in Q1 deliveries (386,810 vehicles), the weakest in nearly three years, driven by a brand crisis tied to CEO Elon Musk’s political stances, rising competition in China, and delays in refreshing its Model Y.

• Production Woes: Output fell to 433,371 vehicles, below Wall Street’s 452,976 estimate, hampered by supply chain issues and a delayed affordable vehicle rollout now slated for early 2025.

• Market Sentiment: Tesla’s stock has lost 40% YTD, reflecting investor unease. The consensus analyst rating is a cautious “Hold,” with a mean price target of $320.56—well above the current $214 but a sharp cut from earlier targets like Wedbush’s $550 (now $315).

• Macro Backdrop: The S&P 500 is down 9% YTD, and the Nasdaq has shed 12.4%, adding pressure on growth stocks like Tesla amidst inflation at 3.7% and 10-year Treasury yields at 4.3%.

Last April, Tesla beat earnings expectations with an adjusted EPS of 45 cents (vs. 51 cents expected) and saw a 13% stock jump, driven by Musk’s promise of affordable EVs by early 2025. Can Tesla pull off another surprise, or will the sales plunge drag it down?

Analyst Pessimism: Justified or Overblown?

Analysts are bracing for a rough quarter, but there’s debate over whether they’re too bearish:

• The Bear Case: Forecasts of $21.81 billion in revenue (down from $27.2 billion in Q4 2024) and $0.43 EPS (flat YoY) reflect real challenges. Weakening EV demand, especially in China (sales down 11.5% in March), and a delayed Model Y refresh are dragging on growth. Tesla’s automotive gross margin is under scrutiny, with price cuts and competition from BYD eroding profitability.

• The Bull Counter: Some argue the pessimism is overdone. Tesla’s energy storage business is growing (projected 50%+ growth in 2025), and deferred revenue from Full Self-Driving (FSD) features could provide a lift—last quarter saw $739 million from FSD alone. Posts on X suggest optimism around a Q2 rebound and the June robotaxi launch in Austin, which could shift focus to Tesla’s tech future.

My View: Analysts are likely underestimating Tesla’s ability to surprise with non-automotive revenue (energy, FSD), but the sales drop is a real concern. I expect a slight earnings beat—say, $0.46 EPS—but revenue may miss at $21.5 billion due to delivery weakness.

Stock Performance: Can Tesla Avoid $200?

Tesla’s stock is teetering at $214, near its support level, with resistance at $292. A plunge below $200 is possible if earnings disappoint significantly:

• Bearish Scenario: A double miss (revenue and EPS) could send TSLA tumbling 10-15%, breaking below $200 to $180-$190, especially if Musk fails to deliver a compelling growth narrative.

• Bullish Scenario: A beat on EPS, coupled with upbeat guidance on robotaxi or affordable EVs, could spark a 10% rally to $235-$240, though it’s unlikely to hit last April’s 14% surge given the tougher macro environment.

My Prediction: I see a modest 5% post-earnings pop to $225 if Tesla beats on EPS and Musk nails the narrative. However, a drop to $200 remains a risk if guidance underwhelms.

Target Price: My 3-month target is $230, balancing Tesla’s innovation potential with near-term headwinds.

Key Metrics to Watch

• Revenue & EPS: Flat EPS and a revenue drop signal a tough quarter, but energy and FSD could cushion the blow.

• Margins: A shrinking margin (13.6% in Q4 2024) is a red flag—watch for any improvement.

• Guidance: Musk’s outlook on robotaxi, affordable EVs, and 2025 growth will drive sentiment.

Visualizing Tesla’s Stock Slide:

Tesla’s 40% YTD decline

Trading Strategy: Play the Earnings

• Bull Play: Buy at $214, stop at $205, target $225. A beat on EPS or strong guidance could drive a quick 5% move.

• Bear Play: Short at $214, cover at $200, stop at $220. A miss could push TSLA below support.

• Hedge: Buy SPY $470 puts to protect against a broader market drop if Tesla’s miss sparks panic.

My Move: I’m leaning toward a small long position at $214, targeting $225, but I’ll hedge with puts given the downside risk.

Risks to Watch

• Earnings Miss: A double miss could tank the stock 15%, especially with high expectations for guidance.

• Musk Factor: Any lackluster commentary on robotaxi or affordable EVs could sour sentiment.

• Macro Pressure: Rising yields (4.3%) and inflation (3.7%) continue to weigh on growth stocks.

What’s Your Take?

Tesla’s at a crossroads—can it repeat last April’s magic, or is $200 the next stop? Are you betting on a beat, or bracing for a plunge? Share your thoughts and trades below—let’s navigate this earnings storm together!

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📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

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