Insights 
VT 
Tesla, a leader in electric vehicles, is set to announce its third-quarter earnings for 2025 on October 22nd. The company has shown remarkable stock performance since its IPO in 2010, but has recently faced challenges such as new tariffs, a slowing EV market, and political backlash. Despite these issues, Tesla shares have increased by 93% in the last six months.
Analysts anticipate moderate sales growth and a fall in EPS growth until 2026. Wall Street predicts Q3 revenue to be $26.45 billion, a 5.05% increase, with an EPS of $0.53, down 26.39%. Tesla has consistently missed earnings expectations, failing to meet them in six out of the last ten quarters, with an average miss of 3.65% over the past four quarters.
Stock Movement Predictions
The options market suggests a possible stock movement of +/- $37.48 or an 8.53% move, and historically, Tesla’s stock has shifted an average of +/- 10.53% post-earnings. The stock could approach its previous high of $488 if earnings are positive, but could drop around $400 if expectations are not met.
The company’s future directions involve assessing the stability of its legacy EV business, monitoring growth in its energy segment, and meeting timelines for new technologies like FSD, Robotaxis, and Optimus.
With Tesla’s earnings just two days away on October 22nd, we are facing a classic setup of strong momentum against weak expectations. The stock is up 93% in six months and forming a bullish chart pattern, yet Wall Street is forecasting a 26% drop in earnings per share. This conflict creates a significant opportunity, as the market is clearly undecided on the direction of the next major move.
The options market is pricing in an 8.53% swing in the stock price following the announcement, which is a substantial move. However, looking back at the last eight earnings reports, we see the average move has actually been a larger 10.53%. This suggests that current options pricing might be underestimating the potential volatility, making strategies that profit from a large price swing attractive.
Future Growth or Risks
On one hand, the concerns about the core auto business are valid and backed by recent data. We’ve seen global EV sales growth slow to just 15% year-over-year in the third quarter of 2025, according to the International Energy Agency, while competitors like BYD continue to gain market share in key regions. A miss on earnings could easily send the stock down to test the $400 support level, which lines up with a recent price gap.
On the other hand, the narrative could quickly shift to future growth, especially with the AI boom driving demand for Tesla’s energy storage solutions. We’ve seen the Federal Reserve cut rates twice in 2025 to 4.5%, which should help vehicle financing costs and could boost forward guidance. If Elon Musk can present a convincing timeline for projects like the Robotaxi network, investors may ignore a weak quarter and push the stock toward its all-time high of $488.
Given the 50/50 chance of the stock moving higher or lower post-earnings historically, picking a direction is risky. We remember how the stock plunged over 12% after missing estimates back in Q1 of 2024, showing the market’s willingness to punish disappointment. Therefore, a sensible approach is to trade the volatility itself, perhaps by buying both a call and a put option to capitalize on a move larger than the 8.53% the market is currently pricing in.
