Electric vehicle (EV) manufacturer Tesla (NASDAQ: TSLA) recorded disappointing results in the second quarter, missing key targets. Reflecting these results, the company’s stock has suffered significant losses, recording a double-digit decline.
As of press time, the stock was valued at $219. Daily losses exceeded 10%, while on the weekly timeframe, TSLA was down by over 12%.
This stock decline follows a more than 40% plunge in Tesla’s second-quarter profit compared to a year ago. The company faces increased competition from established automakers and a slowdown in overall EV sales growth.
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Tesla reported adjusted income of $1.8 billion for the quarter, or 52 cents per share, falling short of analysts’ forecast of 61 cents per share and significantly below the 91 cents per share earned a year earlier.
Analysts set TSLA price
In this context, stock market analysts at CyclesFan have offered possible TSLA price trajectories after the financials, which they termed a “catastrophic earnings report.”
According to CyclesFan, the recent downturn in TSLA shares was predictable, and the next short-term low is projected around the 50% Fibonacci retracement level of the April-July uptrend, approximately $205.
The analysis acknowledged that TSLA peaked at around $271 in mid-July before the earnings report caused a significant decline. Additionally, CyclesFan’s analysis highlighted three critical Fibonacci retracement levels.
The 38.2% retracement at $220.50 has provided some support during the initial post-earnings drop, but the bearish sentiment may push the stock lower. The 50% retracement at $204.99 is identified as the next target for TSLA’s short-term low and is crucial as it represents a significant midpoint of the April-July uptrend.
While not currently the primary target, the 61.8% retracement at $189.30 could become relevant if market conditions worsen.
CyclesFan’s projection aligns with broader market sentiment that anticipates continued volatility for Tesla in the short term. The company’s ability to address its operational challenges and reassure investors will be critical in stabilizing the stock.
Notably, the stock might suffer further losses, considering that Tesla has projected a bleak future. In the earnings call, Tesla did not give a new sales target for the full year.
However, the company warned that “In 2024, the vehicle volume growth rate may be notably lower than the growth rate achieved in 2023.”
Overall, the stock’s trajectory will largely depend on the recovery in the EV market, and Tesla, as a leader in the sector, is likely to benefit from this.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
