Tesla, Inc. (NASDAQ:TSLA) stock has resumed the rally after a report suggesting the postponement of the Aug. 8 robotaxi unveil event, dragged the stock sharply lower last Thursday. A fund manager, who is bullish on the electric vehicle maker, said the stock "still offers a good setup into 2Q earnings next week."

Upside Surprise In Offing? Elon Musk-led EV giant is scheduled to report its second-quarter results after the market closes on July 23. Analysts, on average, expect the company to report earnings per share of $0.62, sharply down from the $0.91 reported for the year-ago quarter. Revenue may have slipped 1.20% to $24.63 billion.

The Future Fund LLC Managing Partner Gary Black took to social-media platform X, formerly Twitter, to express his thoughts on the stock ahead of the imminent earnings. His optimism is premised on the fact that second-quarter consensus has barely moved after the deliveries report, going up merely 2 cents to 60 cents.

The P/E multiple is 102 times based on estimated 2024 earnings and a more modest 76 times the estimated 2025 earnings, Black noted. The valuation, though elevated, is not out of line with recent history, he said.

The fund manager said the most important variable now is the second-quarter auto gross margin, excluding regulatory credits. The consensus estimate is currently at 16.2% compared to 16.4% in the first quarter, although deliveries improved notably from 384,000 units in the first quarter to 444,000 in the second quarter, he said.

"With China volumes strong, discounting in check, and robotaxi event delayed until Oct, expect TSLA mgmt to be more upbeat on the conf call than they would have been otherwise."

China Improvement: Black also commented on weekly China insurance registration data released on Tuesday. He noted that the metric was 11.4K for Tesla for the week ended July 8-14.

Two weeks into the quarter, China sales growth is trending at 36% year-over-year and 121% higher than the previous quarter, he said, adding that Tesla has gotten off to the best start to a quarter since the second quarter of 2023.

"One of the strongest bullish $TSLA storylines is TSLA EV strength so far in 3Q," Black said. The momentum, the fund manager said, likely reflected Tesla's zero-interest rate financing deals in China.

Tesla edged down 0.20% to $256.04 in premarket trading on Wednesday, according to Benzinga Pro data. The stock has gained 3.3% for the year, underperforming the S&P 500 Index, which is up about 19%.

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