Tesla's Q3 Earnings: Can Robotaxi Hopes Fuel a Rally?

Tesla is set to report its third-quarter earnings after the US market closes on Wednesday, weeks after unveiling its highly anticipated robotaxi and delivering a quarterly production update that sent its shares lower.

Analysts expect Tesla's revenue to grow year-over-year, but profit is forecast to decline slightly. The robotaxi unveiling disappointed some analysts who were hoping for more details on how and when the autonomous vehicles would be deployed.

According to Visible Alpha, analysts expect Tesla to report revenue of $254.1 billion for the quarter, up from $233.5 billion a year ago, while profit is expected to decline slightly to $16.8 billion from $18.5 billion in the prior-year period.

Analyst opinions on Tesla stock are mixed: of the 19 analysts tracked by Visible Alpha, nine have a "buy" rating, seven have a "hold" rating, and three have a "sell" rating. Their average price target is $224.89, close to Tesla's Monday closing price of $218.85.

Key Metric: Deliveries

Tesla's third-quarter deliveries exceeded expectations earlier this month but failed to drive the stock price higher as it did in the previous quarter.

Analysts at Wedbush Securities said that the better-than-expected delivery figures were "a step in the right direction," but both they and the market were hoping for Tesla to beat estimates by a wider margin.

However, Wedbush maintained its "outperform" rating and $300 price target on Tesla after the delivery data and robotaxi event, saying it would "buy on weakness" in the stock.

Business Spotlight: Post-Robotaxi Event Reaction

Tesla's stock took a hit following the unveiling of its robotaxi. The company showcased its "Cybercab" prototype and a larger "Robovan," and CEO Elon Musk provided an estimate of when Tesla's Autopilot software might receive regulatory approval, a step toward making robotaxis legal on public roads.

Analysts said that the lack of details on whether Tesla plans to operate its own robotaxi fleet or sell them to customers, and the absence of a lower-priced Tesla model as expected, were among the factors that weighed on the stock.

JPMorgan analysts, who have an "underweight" rating on the stock with a $130 price target, said the event was "significantly lacking in details" and that the rally in Tesla's stock since its lows earlier this year was primarily driven by enthusiasm for the robotaxi event rather than by electric vehicle sales or earnings.

Tesla's stock is currently trading at $217.97, near a support level. The next resistance levels are at $275 and $300, while the next support levels are at $185 and $140.