Tesla Stock Price and Forecast: TSLA consolidates, set to pop higher
- Tesla stock remains poised to break higher.
- Recent earnings data was strong from Tesla.
- NASDAQ: TSLA needs to break $715 soon.
Tesla like many other names has been taking things pretty quiet of late. This is a function of the summer lull, traders taking a well-deserved break, the market being very stretched and at all-time highs and worries over the Delta variant of covid. Tesla has registered a few days of low daily ranges with volatility dropping accordingly. Wednesday provided a little clarity on inflation with the CPI number not as bad as economists had been fearing. This should have paved the way for a renewed move higher, but equities instead sat out the remainder of Wednesday as most indices and major names barely registered any change. Tesla closed moderately lower at $707.82 for a loss of 0.31%.
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Tesla key statistics
| Market Cap | $702 billion |
| Price/Earnings | 358 |
| Price/Sales | 23 |
| Price/Book | 29 |
| Enterprise Value | $753 billion |
| Gross Margin | 22% |
| Net Margin |
6% |
| 52 week high | $900.40 |
| 52 week low | $273 |
| Average Wall Street Rating and Price Target | Hold, $711 |
The recent earnings from Tesla were strong with a beat on the top and bottom lines. Adjusted earnings per share (EPS) came in at $1.45 versus the estimate from Wall Street analysts for $0.96. Sales came in at $11.96 billion, also beating the $11.21 billion estimate. Delivery numbers were also high on investors' minds, and these too were ahead of estimates. Tesla delivered 201,304 vehicles in Q2 2021, an increase of 121% over the same period last year. Tesla said its average selling price had declined by 2% over the year, but its gross margin increased three percentage points from 25.4% to 28.4%. Jefferies liked what it saw in the numbers and increased its rating on the stock earlier this week, which gave Tesla stock a decent 2% gain on Monday. Since then it has been steady though.
Tesla stock forecast
Tesla has held the psychological $700 support and also the technical $697 support from the initial break higher last week. Now the stock is consolidating and forming a bullish continuation wedge. This technical pattern usually results in a breakout in the same direction of the recent trend, in this case higher. Added to our confidence in the bullish call is the Relative Strength Index (RSI) trending higher along with the Moving Average Convergence Divergence (MACD) and Commodity Channel Index (CCI). Tesla stock is also holding above the short-term 9-day moving average. Breaking $715 sees the volume start to thin out, meaning the price will find it easier to push higher. Once it gets above $750, volume thins out even more. Our first target is the high from April at $780.
Tesla stock needs to remain above $697 to keep this call in place.
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
