Earnings of $1.93 per share came up 27 cents a share below analysts' expectations, while revenue of $7.23 billion came in $110 million ahead of estimates and soared about 120% year-over-year.
The stock was pretty mixed after those earnings, given that at the end of the conference call Tesla announced that its CFO would be stepping down. CEO Elon Musk also hinted at increased spending coming up and talked back some of the company's timelines for its upcoming products, like the Model Y and the Tesla Semi.
There's a lot to digest here, from potentially waning demand of the Model 3 in the U.S., to Model 3 expansion in China and Europe. There's worries about the cash flow situation while at the same time, $920 million worth of debt will come due in less than a month. If Tesla stock closes below $359.88, it will owe all of the convertible debt balance in cash, rather than the 50-50 mix of cash and stock it had planned on using.
As if all of this weren't enough, the automaker announced on Monday that it will acquire Maxwell Technologies for $4.75 per share. The company expects the deal to close in the second quarter and will become a subsidiary of Tesla. The all-stock deal places a 54.7% premium on Maxwell, which primarily focuses on energy storage devices. Maxwell had a market cap of roughly $140 million before the deal was announced and the fact that Tesla used stock to finance the deal isn't all that surprising.
Evaluating Tesla Stock
Bulls are actually digesting all of this news pretty well. However, much of the past year has been pretty choppy, with Tesla stock basically flat since the start of 2018. That's left a lot of traders frustrated with the stock's inability to trend in one direction or the other. But if we look at the ranges, there is something to work with.
In an earnings preview, we said:
"On a rally, they will want to see Tesla stock clear and close above $310. Ideally, Tesla would close over the 200-day moving average on a rally. Bears will want the opposite. They will want a rally above $310 to fade and close below this mark. On a decline, they'll want to see support give way and for Tesla to retest (and break) its October lows. The latter -- breaking its October lows -- seems like too much to ask for, in my view, barring something truly unexpected."
For now, it's still a push. Shares are over $310, but with the 21-day and 200-day moving averages looming ahead, Tesla stock still isn't out of the woods. This one looks like it will remains choppy going forward. If it loses $300, bulls need to be cautious in the near term. Over $320 and bears need to be aware of a possible breakout over downtrend resistance (purple line).
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