In anticipation of Tesla (NASDAQ:TSLA) Inc.'s third-quarter results, stock options traders are predicting less volatility, according to Matt Amberson from Option Research & Technology Services. Traders are employing a straddle strategy that expires at the end of this week, forecasting a movement of 5.6% ($13.66). This strategy involves buying both bearish and bullish options at the current strike prices.
As of Wednesday, with Tesla’s stock priced at $244.44, those purchasing straddles could see gains if the stock drops beneath the lower limit of $230.78 or ascends beyond the upper limit of $258.10. This predicted range is tighter than the average 6.6% ($16.03) fluctuation observed over the past twelve quarters.
InvestingPro Data shows that Tesla’s market cap is an impressive 776.68B USD, with a P/E ratio of 63.1. The company has been consistently increasing its earnings per share, a factor that contributes to its high return on assets of 15.32%. This is in line with one of the InvestingPro Tips that Tesla yields a high return on invested capital, further highlighting its strong financial performance.
In contrast, the previous five quarters witnessed an average move of 9.4%, indicating a potentially decreasing trend in volatility. Tesla's earnings per share for Q3 are projected at 73 cents, with a revenue estimate of $24.2 billion. According to InvestingPro, Tesla's revenue for the last twelve months was 94.03B USD, indicating a significant growth potential.
Despite experiencing a 16.7% decline recently, Tesla's stock has seen significant growth this year, with a year-to-date (YTD) increase of 98.4%. This performance substantially outpaces the S&P 500 SPX which, although it suffered a quarterly fall of 4.9%, has risen by 12.8% YTD. InvestingPro Data also reveals that Tesla’s six-month price total return was 38.27%, and its YTD price total return was a remarkable 106.89%.
InvestingPro Tips suggests that Tesla is a prominent player in the automobile industry, trading at a high earnings multiple. The company is also known for holding more cash than debt on its balance sheet, which is a healthy financial indicator. For more insights like these, readers can explore the InvestingPro product which includes 21 additional tips about Tesla and other companies.
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