Tesla Stock On Track To Snap Back 3-Session Losses: Retail Cautious Ahead Of Q4 Deliveries Report
From under $250 ahead of the election, the Tesla stock took off and rallied to an all-time peak of $465.33 (intraday) on Dec. 26.
FollowShares of Tesla, Inc. ($TSLA) rose in premarket trading on Tuesday, the final session for the year, signaling that the stock may snap a three-session slide. Retail mood, however, failed to find any traction.
After a “so-so” first half amid fundamental challenges, Tesla stock came back up strongly, thanks to back-end loaded gains for the year as CEO Elon Musk's bet on President-elect Donald Trump paid off.
From under $250 ahead of the election, the stock took off and rallied to an all-time peak of $465.33 (intraday) on Dec. 26. Since then, the stock has lost 10.7%, dragging it into correction territory.
Even with the pullback, Tesla’s forward price-earnings ratio is at an elevated 121.95.
The premarket move may be due to bargain hunting following the stock’s recent weakness. It has come despite a negative headline regarding a vehicle recall in China.
CnEVPost reported that a statement on China’s State Administration for Market Regulation said Tesla is recalling 77,650 made-in-China electric vehicles (EV) manufactured between Sept. 28, 2021, and Nov. 22, 2024. The recall was due to the vehicles not displaying a monitored tire pressure monitoring system malfunction immediately after startup.
The company has undertaken to rectify the issue through over-the-air upgrades for free.
The next near-term catalyst is the company’s fourth-quarter deliveries report, which will likely drop on Thursday. Most analysts expect the company to report sales in line with the consensus. The sell-side is unanimous that the deliveries report will unlikely be a stock mover given the artificial intelligence (AI) narrative around the stock.
With the incoming Trump administration decisively moving toward removing the EV subsidies, it remains to be seen how it will impact sales in an economy still facing multiple headwinds.
If Tesla successfully develops its full self-driving software in an “unsupervised” form, it could be a major driver of the stock in the new year.
Notwithstanding the premarket gains, the retail mood toward the stock is subdued.
TSLA sentiment and message volume December 31, 2024, as of 5:42 am ET | Source: Stocktwits
On Stocktwits, retail sentiment remained ‘neutral’ (52/100), while message volume perked up from ‘low’ a day ago to ‘normal.’
One Tesla watcher on the Stocktwits platform said the EV subsidy removal is positive for Tesla as it would eliminate competition, which consists of struggling, cash-strapped startups.
Another said even doubling of deliveries in the December quarter may not justify the recent stock surge.
In premarket trading, Tesla stock rose 1.56% to $423.94 as of 5:03 a.m. ET.
Tesla shares have gained 68% for the year.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
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