Tesla share price forecast after Q1 results

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Tesla,Inc. (NASDAQ: TSLA) shares are advancing after the company reported better than expected first-quarter results and announced plans to grow its manufacturing capacity as quickly as possible.

A record quarter on many levels

Tesla reported better than expected first-quarter results this Wednesday; total revenue has increased by 80.6% Y/Y to $18.76 billion, while the non-GAAP earnings per share were $3.22 (beats by $0.95).


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Total revenue has increased above the expectations (+920 million), and the company announced that it produced 305,407 vehicles (+69% Y/Y) in the first quarter of the 2022 fiscal year and delivered 310,048 vehicles (+68%).

The operating margin rose to 19.2% of sales compared with the last quarter’s mark of 14.7%, and the company announced plans to grow its manufacturing capacity as quickly as possible. Tesla expects to achieve 50% growth in vehicle production in 2022 versus 2021, but this will also depend on the capacity and stability of the supply chain. Elon Musk, CEO of Tesla, added:

Q1 was once again a record quarter on many levels, by reaching the highest deliveries, profit, and an operating margin of 19%. This was despite a lot of chip shortages, many logistics challenges, and an overall difficult quarter.

According to the company’s management, supply chain issues became the main limiting factor, which is likely to continue through the rest of 2022. Tesla ended the first quarter of the 2022 fiscal year with a cash position of $18 billion, and the company’s Q1 earnings report impressed analysts.

Wedbush Securities assigned Outperform rating on Tesla after first-quarter results and expressed confidence for the upcoming quarters. Evercore ISI said that Tesla had another excellent quarter, and the current gross margin essentially proves that Tesla can be a 20% sustainable EBIT margin company at higher volumes.

Wells Fargo reported that the first-quarter results of Tesla showed the pricing actions are currently more than offset the rising raw material costs; still, Wells Fargo has a cautious stance on the stock due to its high valuation.

Fundamentally looking, Tesla trades at more than a hundred times TTM EBITDA, the book value per share is around $29, and this company is not undervalued with a market capitalization of $1.04 trillion.

Technical analysis

Tesla shares have advanced slightly above 3% this Thursday and closed the day at $1,008.78.

Data source: tradingview.com

Rising above $1,100 supports the continuation of the positive trend, and the next price target could be located at $1,200 or even above.

On the other side, if the price falls below support at $900, it would be a strong “sell” signal, and we have the open way to $800.

Summary

Tesla reported better than expected first-quarter results this Wednesday and announced plans to grow its manufacturing capacity as quickly as possible. Tesla produced 305,407 vehicles in the first quarter of the 2022 fiscal year and delivered 310,048 vehicles.

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