Tesla’s Q3 net profit dropped by 44% due to reduced prices impacting its earnings.

Fundamental Overview

In the third quarter, Tesla saw a decrease in its net income compared to the same period the previous year.

This decline was primarily a result of lower prices, which drove robust sales growth but also had an adverse impact on the company’s profit margins.

Tesla, headquartered in Texas and known for its electric vehicles, solar panels, and batteries, reported a net income of $1.85 billion for the July-September quarter, marking a 44% reduction from the previous year. Earnings per share also dropped from 95 cents to 53 cents. When excluding stock-based compensation, Tesla’s adjusted net income amounted to $2.32 billion, or 66 cents per share. On this adjusted basis, Tesla’s earnings fell short of the 73 cents per share consensus estimate among analysts, according to FactSet.

The sales performance in the third quarter also represented a decrease from Tesla’s 466,140 vehicle deliveries in the April-to-June period. Tesla attributed this decline to scheduled factory upgrades that led to downtime.

Throughout this year, Tesla has consistently reduced prices to maintain its appeal to buyers, given the increasing variety of electric vehicles available. These price reductions have ranged from $4,400 on Tesla’s best-selling vehicles to as high as $20,000 on its premium models.

Tesla Technical Analysis Daily Chart:

Technical Overview

Tesla is currently trading within a down channel.

Tesla is positioned below all Moving Averages (SMA).

The Relative Strength Index (RSI) is in the selling zone, while the Stochastic oscillator suggests a negative trend.

Immediate Resistance level: 257.10

Immediate support level: 240.73

How To Trade Tesla

After an initial surge in Tesla’s stock price, it subsequently turned bearish, retracing to the 61.8% Fibonacci retracement level, where it discovered a support zone and initiated a recovery attempt. Presently, Tesla has been unable to maintain its upward trajectory, leading to a decline in its stock price. It is currently hovering around a crucial support level, and if this level is breached, there is potential for further downward movement.

TRADE SUGGESTION- STOP SELL– 237.83, TAKE PROFIT AT- 214.44, SL AT- 256.41.