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How to Trade Tesla Motors (TSLA) Ahead of Earnings

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On Wednesday, August 3rd, Tesla Motors Inc. (TSLA - Free Report) will release its second quarter earnings results. The company is currently a Zacks Rank #3 (Hold) and shares are down just over 5% year-to-date.

Watch our video to see David's thoughts on Tesla’s past earnings, looks at what is currently going on with the company, and he'll give us his thoughts on their upcoming earnings announcement.

Furthermore, Dave looked into some potential options trades for investors looking to make a play on Tesla ahead of earnings.

Tesla Motors Inc. in Focus

Tesla Motors Inc. designs, develops, manufactures, and sells electric vehicles and stationary storage products in the United States, China, Norway, and internationally. It primarily offers sedans and sport utility vehicles. The company also offers electric vehicle powertrain components and systems to other manufacturers. Tesla Motors Inc. sells its products through a network of Tesla stores and galleries, as well as through the Internet. The company was founded in 2003 and is headquartered in Palo Alto, California.

Tesla is coming off of first quarter earnings miss, where the company posted earnings that were 58.97% lower than the Zacks Consensus Estimate. Looking back over its last 4 quarters, Tesla has only posted an earnings beat once, and has reported an average earnings surprise of -84.91%.

TESLA MOTORS Price and EPS Surprise

TESLA MOTORS Price and EPS Surprise | TESLA MOTORS Quote

Heading into this earnings report, our Most Accurate Estimate for Tesla is -$1.15, which is in line with the Zacks Consensus Estimate, representing an earnings surprise prediction of 0%.

Tesla has weathered a string of bad news around an investigation into what role its Autopilot, a suite of driver-assistance features, has played in at least on fatal accident, and criticism of its proposed deal to buy solar installer Solar City.

CEO of Tesla Elon Musk also recently released his long-term “master plan”, further adding to the interest surrounding the company and its Q2 earnings report. The plan was as short as its goals were lofty, and analysts and investors are sure to demand more specifics as the plan likely means a continuation of the cash burn from the company and that profits will not be coming in the foreseeable future.

Over the last 60 days the Zacks Consensus Estimate for the quarter has continued to fall, with 2 analysts lowering their estimates for the company. The Zacks Consensus Estimate for Q2 stands at -$1.15, compared to the previous estimate of -$0.87 60 days ago.

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Dave Bartosiak is the editor of the Momentum Trader and Home Run Investor service. He has over a decade of experience in the financial services industry. He has traded forex, futures, stocks, and options. Mr. Bartosiak is a frequent guest on popular business news TV channels such as Bloomberg TV. He’s also the host of a light-hearted, Millennial-minded series of videos called “Trending Stocks.”

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