The Tesla Motors Inc. (Nasdaq: TSLA) stock price has tanked 13.9% in the last month, and many are wondering if this is a good time to buy Tesla stock now that it's at a discounted price.
Tesla Motors is under extra scrutiny this week as the company prepares to report quarterly earnings after the bell on Tuesday, Nov. 3. Analysts are expecting an earnings per share (EPS) loss of $0.48 on revenue of $1.26 billion.
While the company is projecting a loss for the quarter, revenue is expected to grow 35.6% year over year.
Aside from EPS and revenue figures, investors will also be looking closely at total vehicle sales in the quarter. Last week, Tesla announced record sales in China for the quarter at 1,345 vehicles. That was up from Q2 China sales of 883 vehicles and Q1 sales of 797.
China sales accounted for 11% of Tesla's total sales in Q3, but the company expects that share to grow. CEO Elon Musk told the Chinese news agency Xinhua News he expects China sales to match U.S. sales in the next five or six years.
Investors should watch for any updates on Tesla's China business in the earnings report. Other areas to watch will be total deliveries, production numbers, Model X sales, and any update on the construction of the Tesla Gigafactory.
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If Tesla posts disappointing earnings figures, you can expect the Tesla stock price to drop even further next week. Tesla is one of the most volatile stocks on the market, and earnings reports can cause major price swings.
And if you're wondering if you should buy Tesla stock now, it's important to know exactly why the stock has fallen nearly 14% in the last month...
Should I Buy Tesla Stock on the Recent Dip?
Last Tuesday, the Tesla stock price dropped 11.3% intraday after Consumer Reports withdrew its recommendation of the Model S sedan citing "poor reliability."
The huge drop was the typical kind of overreaction we frequently see from Tesla investors. The critical report said drivers would typically have issues with the Model S sedan's charging equipment, the drivetrain, and the "iPad-like" center console.
But most investors completely overlooked the part that said 97% of Tesla owners plan to buy another Tesla in the future.
So the report really wasn't as negative as the headlines made it seem.
Even a slight earnings miss could send TSLA shares much lower. And if the price should dip after earnings, we recommend that long-term investors buy Tesla stock.
According to Money Morning experts, TSLA stock is one of the best long-term investments on the market for investors willing to accept some risk in their portfolios...
You see, Tesla needs to be viewed as more than just a car company. One of the biggest reasons we love Tesla stock's long-term potential is the company's new push into the home battery market.
Earlier this year, Tesla announced a new line of home units built using the same lithium-ion batteries used in Tesla cars. Different models store either 7 kWh or 10 kWh of solar power. It's a major shift for Tesla, making it more than just a car company.
"I think Musk is the most innovative CEO on the planet and that he sees value others don't yet recognize," Money Morning Chief Investment Strategist Keith Fitz-Gerald said in February. "Cars, batteries, innovative business models - nobody knows where it will go but ultimately if you're along for the ride, I think it'd be very hard to go wrong over time."
Money Morning Global Energy Strategist Dr. Kent Moors has spoken of the home battery's importance throughout 2015.
"In everyday use, the unit is expected to allow homeowners to store solar-generated power for use during high-cost periods, giving them the flexibility to use the conventional grid for cheaper, off-peak electricity," Moors said in February.
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