Tesla will announce its earnings for 1Q 2023 on 19 April. Most analysts are expecting lower earnings as Tesla had to lower the price of its vehicles to increase its sales during 1Q.

Tesla announced its delivery for 1Q on 2 April. The delivery showed an increase over previous quarters, but miss the average estimate of analysts only slightly. 

I had expected the stock price to increase due to the higher delivery. Instead, the price dropped by 11% from $207 to $185 over 3 days.

I hold 4,600 shares. The drop of $22 resulted in a loss of US $101,200 in the value of my holdings. 

Some investors are selling the stock because of the lower earnings that are expected to be released on 19 April. 

I have decided to hold the stock and to add another 400 shares to round up to 5,000 shares. Here are my reasons:

a) The price is depressed due to the massive selling in anticipation of the bad results.
b) The average estimate of the earnings for 1Q made by 25 analysts is $0.86 per share, compared to the actual EPS of $1.07 for 1Q 2022 and $1.19 for 4Q 2022. The analysts had already revised the EPS downwards.
c) Tesla has a history of posting actual earnings that are higher than the estimates made by analysts. I expect that the results for the next quarter will also be higher than $0.86.
d) Tesla is likely to show better results because the cost of production is likely to be lower (due to economy of scale and other factors) and they will enjoy the EV tax incentives recently introduced in America.
e) The investors are also likely to look forward to better earnings for the next few quarters.

Against this bullish forecast is the possibility that the global economy will worsen and affect the demand for electric vehicles. 

My choice is to increase my holdings at the current depressed price. 

Tan Kin Lian 

Note - I am expressing a personal view. This is not investment advice.