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The Investor Reaction To Tesla's Earnings Call 'Doesn't Make Any Sense' To This Trader

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The Investor Reaction To Tesla's Earnings Call 'Doesn't Make Any Sense' To This Trader

By the look of Tesla Inc (NASDAQ: TSLA)’s stock, this week’s earnings call went pretty well.

But Dennis Dick, co-host of PreMarket Prep, walked away from what analysts described as a “drama”-less call with more confusion than enthusiasm.

“The trading action [Wednesday] night was kind of silly to a certain extent, but you can’t argue with this,” Dick said on Thursday’s show. "Does it make any sense to me as a CFA charterholder on an evaluation perspective? Hell no. But it doesn’t matter on this stock, and I’ve learned from trading that the numbers sometimes matter and sometimes they don’t. In Tesla’s case, it seems like the numbers never matter.”

Stock Reactions

CEO Elon Musk’s two apologies to analysts who he berated on the previous quarter’s call prompted $3 spikes. Discussion of Tesla's profitability prospects catalyzed similar pops.

“As soon as he started talking about profitability the rest of the half, though, the stock went from $316 to $325 in a heartbeat,” Dick said. “Algos grabbing every offer that they could grab, so obviously you got some news algos that are running off audio and running off what Elon Musk was saying because you saw [the reaction] instantly.”

Dick considers the bullish activity to be misguided and disconnected from Musk’s tone.

“He was saying, ‘well, if the economy stays strong’ — there were a lot of ‘ifs’ — ‘if we get to 10,000 cars a week of production.'"

Musk said he believes Tesla can sustain profitability next quarter and going forward, Dick said. 

“There were a lot of ifs in there and it was kind of tongue-in-cheek. So it wasn’t said confidently, I will tell you that.”

Tesla's stock ended the week at $348.17 per share.

For more expert analysis on the call and earnings report, check out Benzinga’s analyst recap.

Related Links:

Needham Downgrades Tesla, Says Model 3 Refunds Are Outpacing Deposits

Morgan Stanley Still Cautious On Tesla After Q2 Print

Photo courtesy of Tesla. 

Latest Ratings for TSLA

DateFirmActionFromTo
Apr 2021Canaccord GenuityMaintainsBuy
Apr 2021Credit SuisseReiteratesNeutral
Apr 2021Goldman SachsMaintainsBuy

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Latest Ratings

StockFirmActionPT
CMRXHC Wainwright & Co.Maintains18.0
PZZAStephens & Co.Maintains115.0
SIMONeedhamMaintains100.0
STAACanaccord GenuityMaintains150.0
DGIICanaccord GenuityMaintains25.0
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