Trade Alert: Tesla's Earnings

The most expensive tweet I ever read.

One of my informal gauges of Tesla’s success is to see how many of the Tesla chargers are occupied at my local Wawa. On the night I took this last year, they all were.

The Most Expensive Tweet I Ever Read

Twitter now has a feature where you can subscribe to accounts to see premium tweets; the tweet below can before that, but it ended up costing me a lot.

At the time, Tesla, Inc. ( TSLA 0.00%↑ ) was trading just under $110 per share, down more than 70% on the year. There was plenty of negative commentary about the company’s prospects, and I thought it looked like a great buying opportunity. But I respected Slope of Hope founder Tim Knight’s expertise as a market technician and decided to wait until Tesla slipped under $100 to pounce. I never got that chance, and Tesla is up nearly 70% since then.

But just because I didn’t buy Tesla at $110 doesn’t mean I can’t try to make few bucks on its earnings this week.

Tesla’s Earnings Might Offer A Positive Surprise

Two reasons that might be the case:

1. Estimize’s consensus earnings and revenue estimates for Tesla are higher than Wall Street’s for this quarter. Ordinarily, I’d be tempted to dismiss that, given that amateur analysts who make predictions on Tesla might be Tesla fans or shareholders posting what they want to see, but over the last eight quarters, Tesla’s actual revenues were higher than Estimize’s consensus estimates four times, and its actual earnings were higher than Estimize’s seven times. So, they Estimize crowd doesn’t appear to be just Tesla perma-bulls.

2. Elon Musk is livestreaming Tesla’s earnings call and Q&A on Twitter this afternoon:

   

   Presumably, he’d be less inclined to do so if Tesla’s Q1 numbers were bad.

So, I’m willing to bet that Tesla shares get at least a modest bump after earnings. The trade I placed with that in mind offers more than three times as much potential upside as its potential downside.

Details below.