Tesla (TSLA) shares have fallen for four straight days ahead of its third-quarter earnings report, reflecting nervous market sentiment. Investors are closely watching the upcoming sales, earnings per share (EPS) and margin data.

The market expects EPS to be $0.60 in the third quarter, up from $0.52 in the second quarter but down from $0.66 in the same period last year. Tesla expects to deliver about 463,000 vehicles in the third quarter, exceeding 444,000 in the second quarter and 435,000 in the same period last year.

Sales growth is the main reason for the improvement in EPS, but EPS is still under pressure compared with the same period last year due to increased promotional expenses and higher manufacturing costs for new models.

To stimulate demand, Tesla has stepped up its promotional efforts. Guggenheim analyst Ronald Jewsikow pointed out that Tesla's re-introduction of promotional programs in the United States, including 0% annual interest loans, is aimed at increasing sales, but it may also have a negative impact on the company's profit margins.

In the second quarter, Tesla's operating profit margin was only 6.3%, down 3.3 percentage points from the same period last year. Investors are hoping the company can reach operating margins of about 8% in the third quarter to boost confidence.

In addition, gross margins for the automotive business, excluding the impact of emissions credit sales, are also critical. Tesla's adjusted automotive gross margin in the second quarter was 14.6%, about 3.5 percentage points lower than the same period last year. If the gross margin exceeds 14.6% in the third quarter, it will be seen as a positive signal.

Although third-quarter sales data is about to be released, the market is more concerned about Tesla's outlook for fourth-quarter and future sales. CEO Elon Musk has said that he expects total sales to increase in 2024, but market analysts are reserved about this. Analysts predict that Tesla's sales in the fourth quarter will reach about 490,000 vehicles, a record high, and full-year sales will be about 1.8 million vehicles. To surpass last year, Tesla needs to achieve sales of 515,000 vehicles in the fourth quarter.

Investors are looking to Tesla management to provide information on its 2025 sales target, which analysts expect to reach about 2 million units. If Tesla can prove its ability to achieve that goal, the stock price is expected to be supported.

The options market shows that Tesla's stock price is expected to fluctuate by about 6% after the release of earnings reports, while the average stock price change after the past four earnings reports was about 11%, including three declines and one increase.

Since the beginning of this year, Tesla's stock price has fallen by about 12% in total, and has further fallen by about 11% since the second quarter earnings report in July was lower than expected. In addition, after the autonomous driving technology day on October 10, the stock price fell by about 8% due to the lack of detailed explanation of the development of autonomous driving technology in the market.