The electric car giant Tesla (#Tesla) yesterday’s performance was in line with analyst expectations. As of yesterday’s close, Tesla released the 2021 third quarter earnings report which showed that despite the shortage of semiconductors, port congestion and troubled blackout, its performance remains strong, including: total revenue (Total Revenues) was $13.757 billion, compared with growth in the previous quarter and last year that were 15% and 57% automobile business income accounted for 87.64%, energy business (solar and energy storage products) revenues accounted for 5.86%; services revenue (automatic driving-related income) accounted for 6.50%; per share profit ( EPS) is $1.86, compared with the previous quarter and last year were up 28% and 145%; GAAP net income (GAAP Net Income) two degrees more than $1 billion, reported $1.62 billion, compared with the previous quarter a 42% increase was recorded, and it was nearly 4 times higher than the same period last year. The report also shows that Tesla’s net profit was mainly driven by the 30.5% and 26.6% increase in corporate gross profit margin and overall gross profit margin respectively, both of which set records in at least the past five quarters. The company also reported that its cash and cash equivalents (Cash & Cash Equivalents) recorded a three-quarter decline to $16.065 billion , but still slightly higher than about 10.56% in the same period last year.
Tesla remains optimistic about its short-term outlook, stating that “operating profit margins will continue to grow over time”, “capacity expansion and plan execution will continue to reach industry-leading levels”, and “automotive deliveries will achieve an average annual rate of 50% rise”. On the bright side, the decision to replace nickel-cobalt-aluminum with lithium iron phosphate (LFP) batteries in its cars will help Tesla increase its profit margins without having to increase prices; continuous improvement of fully automated driving System (FSD); a large number of job applications related to artificial intelligence (the future of Tesla’s products may make a greater leap forward) these factors have the potential to boost Tesla’s performance. On the other hand, investigations by the National Highway Traffic and Safety Administration, increased competition (US: Ford, Europe: Volkswagen, China: Weilai), and regional or political risks may become obstacles to Tesla’s progress.
As of yesterday’s close, #Tesla’s stock price remained stable near the closing price of the previous day, at $864.41. The overall upward trend structure has not been destroyed. From the perspective of technical indicators, the MACD fast line and slow line formed a golden cross on the 0 axis, and it is still continuing to turn upward. However, the RSI and Stochastics are hovering in the overbought zone, the latter has formed a death cross, and so we still need to be alert to the risk of technical price corrections.
The $890- $900 area is 1-month highs and represents the near-term resistance area for the asset. A successful breakthrough in this area may provide an opportunity for #Tesla share price, to extend its gains to $945 and $1015. Otherwise, $830 could provide the nearest support level. Together with the top trendline of the ascending channel, they form a solid support zone. Therefore, a strong bearish candlestick closing below this area may indicate weakness in prices, with attention shifting to $760-764 (the median analyst estimate) and $700, if this scenario takes place.
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Larince Zhang
Market Analyst
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