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Tesla sheds $100B from its market cap in a week; Is TSLA a buy?

Tesla sheds $100B from its market cap in a week; Is TSLA a buy?
Vinicius Barbosa

Tesla Inc. (NASDAQ: TSLA) has suffered massive losses in the stock market after a fairly disappointing Q3 report revealed on October 18’s market closure.

According to data retrieved by Finbold from YCharts on October 19, Tesla lost more than $100 billion in market cap since its week-peak at $808.89 billion on October 17, to the current $700.88 billion in market capitalization at the time of publication.

Tesla (TSLA) market cap chart. Source: YCharts

Meanwhile, TSLA is trading at $220.74 per share on Nasdaq, approaching an important support zone at $215 in the daily chart. Tesla stock ability’s to hold this support zone will most likely set its path moving forward. 

TSLA 1D, Nasdaq. Source: TradingView

Notably, the TSLA Relative Strength Index (RSI) shows weakness for the stock at 30.32 points. Crossing the 30-point line would suggest that Tesla Inc. might be oversold in the stock market, which could create a buying opportunity for investors who still believe in the company’s fundamentals.

What is happening with Tesla?

In its Q3 report, Tesla’s non-adjusted net income for the quarter stood at $1.85 billion, while the total profit plummeted roughly 22% year-over-year and the company missed key fundamental metrics.

One of them, the reported adjusted earnings per share (EPS) of 66 cents, missed the stock market’s estimation of 73 cents. Additionally, the revenue came in at $23.35 billion, while the analysts were projecting $24.1 billion. This was the first time Tesla missed both EPS and revenue estimates since Q2 2019.

Moreover, the competitiveness is increasing in the Electric Vehicle’s (EV) sector. The Chinese contender, Nio Inc (NYSE: NIO) has set new milestones in meeting consumer demands. The company is recording accelerated growth in the number of delivery units.

All things considered, Tesla faces new challenges in an industry previously dominated by its products, having to dodge its competitors amid hostile macroeconomics. Nevertheless, TSLA may still offer good buying opportunities short term in case it holds price support.

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