Buy or Sell Tesla Stock Ahead of Its Upcoming Earnings?

Tesla (NASDAQ:TSLA) is scheduled to announce its earnings on Wednesday, July 23, 2025, during what is anticipated to be another difficult quarter for the EV giant. Earnings are expected to be around $0.44 per share, according to consensus estimates, reflecting a 15% drop compared to the previous year, while revenues are anticipated to decrease by 11% to $22.7 billion. Tesla has already released its delivery figures for the quarter, showing that it delivered 384,122 vehicles in the second quarter, a 13.5% decrease from 443,956 units a year prior. This decline highlights the larger challenges Tesla is encountering. Demand for EVs is weakening in crucial markets like the U.S., where CEO Elon Musk’s political engagements have triggered consumer pushback. Competitors, particularly from China, are rapidly narrowing the technology and price differential. Nonetheless, Tesla’s expanding energy and services divisions, especially in battery storage and services revenue, may help mitigate this situation somewhat. Margins are also projected to stay under pressure. In Q1, gross margins were 16.3%, down from 17.4% the year before, and significantly lower than the 25% plus margins the company was achieving just a few years back.

Tesla currently boasts a market capitalization of $946 billion. Revenue over the past twelve months reached $96 billion, and the company was operationally profitable, with $7.1 billion in operating profits and net income of $6.4 billion. That said, if you’re looking for upside with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative – having outperformed the S&P 500 and delivered returns exceeding 91% since its inception.

See earnings reaction history of all stocks

Tesla’s Historical Odds Of Positive Post-Earnings Return

Here are some insights on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 12 positive and 8 negative one-day (1D) returns noted. Overall, positive 1D returns were observed about 60% of the time.
• However, this percentage drops to 50% when we examine data from the last 3 years instead of 5.
• The median of the 12 positive returns = 4.2%, and the median of the 8 negative returns = -6.1%

Additional data for observed 5-Day (5D) and 21-Day (21D) returns following earnings are summarized with the statistics in the table below.

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively lower-risk strategy (though it may not be beneficial if the correlation is weak) is to analyze the relationship between short-term and medium-term returns post-earnings, identify a pair with the highest correlation, and make the appropriate trade. For instance, if 1D and 5D exhibit the highest correlation, a trader can take a “long” position for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on the last 5-year and 3-year (more recent) history. Note that the correlation 1D_5D pertains to the correlation between 1D post-earnings returns and subsequent 5D returns.

Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (a combination of all three, the S&P 500, S&P mid-cap, and Russell 2000), producing solid returns for investors. Separately, if you want upside with a steadier experience than an individual stock like Tesla, consider the High Quality portfolio, which has surpassed the S&P and recorded returns greater than 91% since its inception.