Tesla Earnings This Week: Here’s How Much Traders Expect the Stock to Move

Tesla's quarterly report drops this week—and the options market is already pricing in the turbulence. Forget calm seas; traders are bracing for a significant swing.

The Volatility Bet

Implied volatility tells the real story. It's not about whether the numbers beat or miss—it's about how far the stock could lurch in either direction. The market's pricing a move that would make most traditional auto execs queasy.

Earnings as an Event Catalyst

These reports have become less about fundamental accounting and more about high-stakes momentum triggers. A single phrase from the earnings call can ignite algorithms and override weeks of steady trading. The reaction often has more to do with narrative than with nitty-gritty financials—welcome to modern price discovery.

The Trader's Dilemma

Do you bet on the headline number, the guidance, or the CEO's mood? In today's market, the 'why' behind a move is frequently an afterthought. The immediate 'how much' is the only game in town, a perfect setup for those who love volatility and can stomach the spin. After all, in finance, a good story often trades at a premium to boring old facts.

Key Takeaways

• Tesla is slated to post its fourth-quarter results after the closing bell Wednesday, with revenue and profits expected to decline year-over-year.
• Options pricing suggests traders expect Tesla's stock could move about 5% in either direction by the end of the week.

Tesla is set to report its latest financial results after the market closes on Wednesday, with traders anticipating a sizable MOVE from the electric vehicle maker's stock following the results.

Options pricing suggests traders expect Tesla's (TSLA) stock could move about 5% in either direction by the end of the week. A shift of that size from Monday's close around $435 could push the stock back up to $459, about 6% off December's record, or drag it down to $412.

During the company's earnings call, investors will likely be listening closely to hear what CEO Elon Musk has to say about Tesla's developments in self-driving cars and robotics, which the CEO has previously suggested could eventually become the company's main revenue drivers as its EV sales come under pressure. In an interview at the World Economic Forum last week, Musk said he expects Tesla could start selling its Optimus humanoid robots to the public by the end of next year.

Why This Matters to Investors

Tesla shares have hit record highs in recent weeks, despite declining vehicle sales, as investors and analysts have focused more on the growth potential of the company's advances with artificial intelligence, self-driving cars, and smart robots.

Optimus sales, along with Tesla's Full Self-Driving (FSD) software subscriptions, are among the metrics that WOULD need to grow for Musk to earn tranches of stock as part of his newest compensation agreement. Earlier this month, Musk announced that Tesla will only offer FSD software under a recurring subscription starting next month, in a move that could help the company raise subscription revenues.

Tesla also recently confirmed it has removed human safety monitors from the front seat of some of its robotaxis currently operating in Austin, in what Morgan Stanley analysts suggested could mark an important milestone for the company's robotaxi strategy.

Related Education

For the fourth quarter, Tesla is expected to report revenue of $25.1 billion, down about 2.4% from the same time a year ago, while adjusted earnings per share are forecast at $0.46, down from $0.60 last year, according to estimates compiled by Visible Alpha.

Wall Street analysts are divided on the stock. Of the 11 analysts with current ratings tracked by Visible Alpha, six consider it a "buy," compared to three "hold," and two "sell" ratings. Their average price target around $446 would represent just a 2% rise from Monday's close.