If Tesla wants to get out of its recent decline, Musk has to bring some good news about fundamentals.
U.S. tech stocks continued to tumble on Friday, dragging down a number of stocks, including Tesla (TSLA). Tesla has not fallen too much at the beginning of 2022, but if it cannot maintain its recent level, it may be difficult to escape a big fall.
As of Friday (Jan. 21), the NASDAQ Composite Index, which is dominated by technology stocks, has fallen as much as 12%, and the faster-growing technology stocks have started the year unfavorably.
The nasdaq's decline last week was largely blamed on Netflix (NFLX), which saw lower-than-expected subscriber growth in the fourth quarter of last year, causing shares to plunge about 20 percent on Friday.
While Tesla and Netflix's businesses have nothing to do with each other, Tesla, like all other stocks, cannot stand alone in the stock market decline.
Tesla shares fell 5.26 percent on Friday to close at $943.9. From a technical point of view, if Tesla's stock price cannot remain around $990, it may fall further towards $900. If so, Tesla could fall about 5 percent next.
Although this is only a technical analysis, it is important to judge short-term trends.
However, Tesla's fourth-quarter earnings report on January 26 is expected to give a boost to the stock price, and Wall Street expects its earnings per share to be about $2.30. Expectations for earnings per share have been rising ever since Tesla's car deliveries were higher than expected in the fourth quarter. Tesla delivered nearly 309,000 vehicles in the fourth quarter, up from nearly 270,000 expected by Wall Street.
If earnings beat expectations significantly, Tesla's stock price will surely get a boost.
Tesla CEO Musk's statement after the earnings release will be on the attention of investors and analysts, although he does not always speak on Tesla's earnings call, but this time he will attend the meeting and introduce the latest situation of the product. Investor concerns include the delivery time of cybertruck, when Tesla will launch a low-priced model, and the launch of Tesla's two new factories in Texas and Germany.
| Al Root, contributor to Barron's
Edited | Guo Liqun
Translated | Guo Huiping
Copyright Notice: The original article of Barron's Magazine may not be reproduced without permission. The English version is published on January 21, 2022, "If Tesla Stock Doesn't Hold This Level, the Shares Could Fall a Lot Further."
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