Key Insights
- Tesla stock price will be in the spotlight next week as it publishes its financial results.
- Analysts expect the numbers to show that its Q4 and FY’25 revenue and profits dropped.
- The stock has formed an island reversal pattern, pointing to a potential drop.
Tesla stock price has dropped into a correction after falling by over 14% from its highest level in December. It dropped to a low of $425 on Tuesday, erasing billions of dollars in value. This article explores whether the TSLA stock will rebound or crash after it publishes its earnings on January 28.
Tesla Revenue and Profits Expected to Drop
Tesla, the biggest automaker by market capitalization, has come under pressure in the past few months as sales in the United States and other regions weakened.
Data released earlier this month showed that the company made 434,358 vehicles and delivered 418,227 vehicles in the fourth quarter. Its deliveries were 16% lower than the 495,570 vehicles it delivered in the same period in 2024.
The report showed that the company delivered 1.63 million vehicles in 2025, down from 1.789 million in 2024.
Therefore, Wall Street analysts believe that the upcoming results will show that the company’s revenue and profitability dropped in the fourth quarter and for the full year. The average estimate is that its revenue dropped by 3.67% in the fourth quarter to $24.76 billion, bringing its annual revenue to $94.67 billion, down by 3% YoY.
Tesla’s earnings per share (EPS) are also expected to be much lower than what it made in 2024. Analysts expect the quarterly EPS to drop from 73 cents to 45 cents, while the annual figure moved from $2.42 in 2024 to $1.64. As the chart below shows, there is a possibility that the company’s EPS will be weaker than expected, as it has done in the last four consecutive quarters.
Tesla is Facing Major Headwinds as it Evolves Into an AI and Robotics Company
The ongoing Tesla stock crash is occurring amid major challenges across its business lines.
Sales of the Tesla CyberTruck, which the company spent billions of dollars to develop, have plunged in the last year.
The company’s sales across all its markets has dropped. For example, sales in Europe will likely be affected now that the bloc has eased tariffs on Chinese EVs. Indeed, data shows that Tesla’s vehicle registrations in Europe dropped by 27.8% in 2025 to 235,322.
The same is happening in China, where competition has soared in the past few months. Some of the top competitors are companies like Nio, Li Auto, XPeng, Xiaomi, and BYD. Its sales in China dropped modestly to 625,698.
Sales in the US will likely be affected by the end of EV tax credits, which previously saved consumers at least $7,500 per vehicle.
Tesla is now pivoting its business toward artificial intelligence and robotics, where it hopes its robotaxi business will boom in the future. The challenge, however, is that the industry is highly competitive, with Waymo leading.
Most importantly, Tesla is highly overvalued given its business facing major headwinds. It has a forward PE ratio of 267, much higher than most companies, including fast-growing ones like Nvidia and AMD.
Tesla Stock Price Technical Analysis
The three-day chart shows that the TSLA stock price peaked near the key psychological level at $500 in December. This was an important level as it aligned with the highest point in December 2024.
The stock has formed a large double-top pattern with a neckline at $215. It has also formed an island reversal pattern, which happens when an asset consolidates after forming a gap. This pattern often leads to a bearish reversal
The stock has also formed a bearish divergence pattern as the Percentage Price Oscillator (PPO) has continued moving downwards and is nearing the zero line.
Therefore, the stock will likely continue falling as sellers target the 50-day Exponential Moving Average (EMA) at $406. A trigger for the bearish breakdown will be the upcoming financial results.
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
