Are Tesla shareholders becoming an insatiable bunch?

After US markets closed on Monday, the electric vehicle maker reported its highest-ever quarterly net profit (non-GAAP net income) of over $1 billion. The company reported its 7th consecutive quarterly net profit, which was helped in part by the $101 million the company made selling Bitcoin during the period.

Adjusted earnings per share of 93 cents whopped analysts’ estimates of 80 cents!

Meanwhile, the company’s revenue of $10.39 billion for the quarter marked a 74% increase compared to the same period last year, while only slightly missing analysts’ estimates for $10.41 billion. Tesla also delivered 184,800 cars around the world during the first 3 months of 2021, which is still about 4000 more vehicles delivered during the quarter prior (Q4 2020).

Yet, Tesla’s share price fell by as much as 3.1% in after-hours trading.

Seems like Tesla shareholders, as well as market participants at large, need more convincing before ploughing back into the stock. As of yesterday’s close, Tesla’s share price remains about 16.4% below its highest-ever closing price on 26 January 2021.

From a technical perspective, Tesla appears to be finding support from its 50-day simple moving average. The stock has been posting a series of higher highs and higher lows since March 5, the day which was the trough of its near-40% drop since breaching the psychologically-important $900 mark on 25 January.

However, with momentum still pointing north, Tesla may still hold enough lure to entice more investors and traders into restoring its share price closer to its not-too-distant former glory.

Tesla rides against headwinds

As for the outlook for its core business, Tesla didn’t reveal a specific target for 2021 deliveries but stuck to its script of 50% annual growth in deliveries “over a multi-year horizon”. Tesla is also increasing its production capabilities, with new factories in Texas and Berlin slated to come online this year, while Gigafactory Shanghai is expected to continue expanding.

Still, the EV-maker has to weather challenges, both near-term and long-term.

The computer chips shortage felt across multiple industries worldwide was described as a “huge problem” by Elon Musk himself, who also expects the problem to persist through Q3 2021. Over the longer-term, there are other players jumping onto the EV bandwagon, from Rivian Automotive (which has the backing of Amazon) and Lucid Motors to traditional players such as Volkswagen. More entrants into the EV game threatens to erode Tesla’s market share and its financial future.

Can Tesla retain its status as stock market darling?

Considering Tesla’s waning cult status, evidenced by its 4.61% year-to-date gain which lags behind the double-digit performance for the S&P 500 and the Dow, the EV maker may have its work cut out to stir the same kind of fervour that the stock enjoyed throughout 2020.

Looking ahead, Tesla may have to rely less on Bitcoin bets and regulatory credits to boost its top and bottom lines, and more on its core business in order to entice fundamentally-driven investors.

How could Tesla’s stock perform today?

Historically, Tesla’s share price registers a 7.5% single-day absolute move (in either direction) after its earnings release. Markets had priced in a 9.43% move, either upwards or downwards today.

Such positioning suggests there could be a major move for Tesla’s share price when the US cash session opens on Tuesday, with investors having already had plenty of time to digest the company’s latest quarterly results.

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