Why Tesla Stock Dropped Before Earnings

On Wednesday, Jan. 26, Tesla (NASDAQ: TSLA) will report its Q4 earnings for fiscal year 2021 -- so the fact that Tesla stock is falling today doesn't portend particularly well. As of 11 a.m. ET, Tesla stock is trading down 2.5% -- about five times worse than the decline on the broader Nasdaq index.

Why Tesla stock is down isn't immediately clear. The latest read on the company's earnings from Wall Street, after all, was rather positive. Yesterday, Jefferies & Co. raised its estimates for both 2022 and 2023 earnings, saying Tesla is growing faster than expected and has "marginally higher volume-driven gross margin," as TheFly.com reported yesterday. Jefferies predicted that Tesla will continue to command a "disproportionate share of the industry profit pool" -- and the banker expects to see further evidence of this trend in next week's report.

But not all the news is so good.

Image source: Getty Images.

Source Fool.com