Tesla shares gain amid release of successful quarter results

Tesla (TSLA.US) shares are already gaining nearly 8% in pre-market trading after releasing solid financial results for Q1 2022 that exceeded Wall Street expectations. Some investors are hoping that Tesla's surprisingly strong results could bring a real 'belated' spring to the stock market:

• Revenue was $18.6 billion, compared to $10.39 billion in the same quarter a year earlier, an increase of nearly 81%. One of several factors behind this success is certainly an increase in the prices of the vehicles produced while demand has increased;

• Analysts were expecting earnings of about $15 billion, while FactSet analysts were expecting $17.85 billion in profit at $2.26 per share, which could be considered a very optimistic forecast;

• Net profit was $3.2 billion, $3.22 per share which exceeded all expectations. For the corresponding period in 2021, Tesla earned $438 million earning $0.39 earnings per share in 2021;

• The automotive segment provided the company with $16.86 billion in revenue and grew 87% from Q1 2021;

• The company produced nearly 310,000 vehicles in Q1 2022 and expects to increase production by 60% from last year. Margin on car sales reached 32.9% which is also a significant increase from 27% in 2021;

• The company's EBIDTA (before tax) per vehicle delivered increased by almost 60% to $16,203 in Q1. 2022 compared to 2021 results;

• The company pointed to continued problems with commodity prices and supply chain disruptions and forecasts that the situation will continue through the end of this year;

• Tesla achieved record results despite supply chain issues, a result that is all the more impressive when you consider that some factories are still not operating at full capacity and Tesla's Chinese unit had to temporarily halt work and was affected by China's 'Covid zero' policy amid a rise in coronavirus infections;

• Elon Musk announced that he will create a 'robotaxi' by 2024 and start its mass production in the same year and make autonomous vehicles profitable. Ultimately, the price for driving a mile with such a vehicle is to be lower than the price of buses, subways and, of course, regular cars. He also announced production of an electric 'Cybertruck' pickup in 2023.

• Tesla's CEO is known for his marketing skills and visionary flair, but it's hard to assume that this kind of revolution in transportation will happen in just a few years, it could be a much longer process before autonomous vehicles dominate the market through price competitiveness. Additionally, Musk noted that the Optimus humanoid robot the - company is developing could ultimately become the company's next sales hit, surpassing even the car business;

• Musk has not commented on the high-profile Twitter issue, although last week he made a $43 billion bid to acquire one of the most widely used global communication channels;

• 'Gigafactories' in Berlin and Austin could go a long way toward compensating the company for the loss of capacity in the East due to China's blockade of Shanghai;

Tesla's strong results and bold future outlook may give some breathing room to the bulls, who have clearly struggled to resist sellers in recent days. Yesterday's weak results from Netflix (NFLX.US), which had previously heralded a deterioration in stock market sentiment earlier in the year, have been somewhat offset. 

From a technical perspective, Tesla (TSLA.US) shares are in a long-term uptrend initiated after the Covid-19 pandemic meltdown. The start of 2022 brought high volatility to the company's shares, which are currently in a corrective move. Indications of the pre-market level indicate the opening of quotations above the local peak from this week and near the 61.8% Fibo retracement limit. If this level is also broken upwards, the demand side may accelerate growth towards the levels near $1150, where the limit created by the 78.6% Fibo retracement and the upper limit of the medium-term downtrend runs. The closest support remains the level of yesterday's close and retracement of 38.2% Fibo (near $945 per share). Source: xStation 5