Tesla’s (TSLA) stock is down 4% in 2020–24, plunging about 3% as the electric vehicle giant revealed lower-than-expected fourth-quarter earnings and revenue in late January.
Analyst consensus now projects 2024 Tesla earnings below 2023 levels, indicating another year of negative growth for this growth stock with 2023 now in the rearview mirror.
In the meantime, Morgan Stanley Tesla bull Adam Jonas recently released an investor note in which he lowered his 2020 Tesla 24% earnings projections by 5%, indicating that the EV giant might possibly lose money this year.
Although Jonas cut his price target for Tesla from 345 to 320, he kept an overweight rating on the stock. Additionally, Jonas reduced his Tesla 2024 EPS estimates to $1. 51, his previous view was $2. 04 per share, with auto gross profit margins falling to 11 percent (excluding regulatory credits). 4% as the analyst foresees continued demand issues for EVs.
“EV demand continues to decelerate despite continued price cuts. Strong hybrid momentum is vying for the marginal EV buyer as fleets dump EVs, according to Jonas’ March 5 post. “This year could be the moment for Tesla to potentially report a GAAP EBIT loss in the automotive business.” “.
Wall Street expects Tesla earnings per share of just $2. 96 a share in 2024, according to FactSet. That would be a around a 5% decline vs. last years $3. 12. That was a 23% decline vs. 2022. Analyst project a solid increase in 2025 to $4. 13 a share. However, Wall Street has slashed projections from $5. 27 at the end of last year and $6. 90 at the end of February 2023. Meanwhile, actual Tesla earnings peaked in 2022 at $4. 07 a share.
Tesla’s stock has taken a beating in 2024, falling over 30% since January. Investors are concerned about the company’s ability to maintain its strong growth, especially in the face of increased competition and a potential economic slowdown. However, analysts are divided on whether Tesla is a good buy now, with some arguing that the stock is undervalued and others warning of further declines.
Key Factors Impacting Tesla’s Stock Price:
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Slowing Growth:
Analysts are concerned that Tesla’s growth may be slowing down. The company delivered 8.5% fewer vehicles in the first quarter of 2024 compared to the same period in 2023. This decline is attributed to various factors, including supply chain issues, increased competition, and a potential slowdown in the overall EV market. -
Competition:
Tesla is facing increasingly stiff competition from traditional automakers and new EV startups. Companies like Volkswagen, Toyota, and Ford are all investing heavily in electric vehicles, and they are starting to catch up to Tesla in terms of technology and range. Additionally, new startups like Rivian and Lucid are also gaining traction in the luxury EV market. -
Economic Uncertainty:The global economy is facing a number of headwinds, including rising inflation interest rates, and geopolitical tensions. These factors could lead to a slowdown in consumer spending, which could hurt Tesla’s sales.
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Elon Musk:Tesla’s stock is closely tied to the performance of its CEO, Elon Musk Musk’s recent acquisition of Twitter has raised concerns among some investors about his ability to focus on Tesla Additionally, Musk’s erratic behavior and controversial tweets have sometimes hurt Tesla’s stock price.
Analysts’ Opinions on Tesla Stock:
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Morningstar:
Morningstar analysts believe that Tesla is fairly valued at its current price. They have a 3-star rating on the stock and a fair value estimate of $195 per share. However, they caution that Tesla is a high-growth stock and that slowing growth assumptions could have an outsized impact on its price. -
Wedbush:
Wedbush analyst Dan Ives is bullish on Tesla. He believes that the stock is undervalued and has a price target of $300 per share. Ives argues that Tesla is still the leader in the EV market and that its long-term growth prospects are strong. -
Morgan Stanley:
Morgan Stanley analyst Adam Jonas is more cautious on Tesla. He recently cut his price target on the stock to $165 per share, citing concerns about slowing growth and demand. Jonas believes that Tesla could potentially lose money this year.
Is Tesla a Good Buy Now?
The answer to this question depends on your individual investment goals and risk tolerance. If you are a long-term investor who believes in Tesla’s long-term growth prospects, then the current price could be a good opportunity to buy the stock. However, if you are looking for a short-term investment or are concerned about the risks facing Tesla, then you may want to wait before buying the stock.
Additional Factors to Consider:
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Tesla’s Financial Health:
Tesla is in a strong financial position, with a large cash balance and no debt. This gives the company the flexibility to invest in growth and weather any potential economic storms. -
Tesla’s Technology:
Tesla is a leader in EV technology, with a strong brand and a loyal customer base. The company is also investing heavily in autonomous driving and other future technologies. -
Tesla’s Valuation:
Tesla’s stock is currently trading at a price-to-earnings ratio of around 80. This is a high valuation, but it is in line with other high-growth tech stocks.
Tesla’s stock is facing a number of challenges, but the company also has a number of strengths. Ultimately, the decision of whether or not to buy Tesla stock is a personal one. Investors should carefully consider all of the factors involved before making a decision.
Additional Resources:
Disclaimer:
I am an AI chatbot and cannot provide financial advice. The information provided above should not be considered as investment advice. Please consult with a qualified financial advisor before making any investment decisions.
Q4 Earnings Overshadow Record Deliveries
In Q4, the company delivered 22,969 “other models” and 461,538 Model 3/Y vehicles. As of right now, Tesla manufactures the Cybertruck, Model Y, Model S, Model X, and Model 3.
Tesla had been aiming to deliver 1. 8 million vehicles in 2023. The consensus on Wall Street prior to Tesla’s data release predicted that one Tesla vehicle would be delivered in 2023. 797 million, just below that 1. 8 million target, according to FactSet.
The excitement surrounding the November election was followed by pessimism at the end of 2023. 30 Cybertruck event.
With much fanfare, Tesla unveiled 12 Cybertrucks at its Austin, Texas, facility.
Elon Musk, the CEO, addressed the assembly, saying, “We have a car here that experts said was impossible, that experts said would never be made.”
The EV behemoth is selling the Cybertruck in three different trim levels. The rear-wheel drive model, which has a 250-mile range, is the most expensive at $60,990. By 2025, the base model will be accessible, as stated on the Tesla website.
The base price of the all-wheel drive model is $79,990, and its range is 340 miles. Additionally, Tesla is selling the Cyberbeast, the top trim, for $99,990 and a 320-mile range. Delivery of the Cyberbeast and the all-wheel drive variant is scheduled for 2024.
Tesla declared four years ago that the starting price would be $39,900.
Tesla Juggles Production And Supply
On Feb. 4, the EV giant raised the U. S. price of its Model 3 Long Range variant. The price of the Model 3 LR has increased by $1,000 to $46,990. Tesla kept the U. S. price of its Rear-Wheel Drive version at $38,990.
On Feb. 22, Tesla raised the cost of its Long Range Model 3 in the United S. by $250 , bringing the price to $47,740. Back on Feb. 10, Tesla announced limited-time discounts for Model Y variants. However, Model Y inventory is offered at much lower prices.
Meanwhile, tighter battery sourcing regulations have rendered the updated Model 3 ineligible for federal tax credits. This indicates that the Model 3 is frequently significantly more costly than the Model Y.
Troy Teslike on Feb. 23, wrote on X that Tesla is “attempting to dissuade individuals from placing an order for a Model 3 version they are unable to manufacture when there is an abundance of Model Y inventory available for purchase.” “.
U. S. The revised Model 3 Long Range’s delivery window has been pushed back to April or May. That largely reflects the restricted initial production at Tesla’s Fremont facility.
Large incentives for entry-level Model 3 and Y vehicles, such as insurance subsidies, low loan rates, and more, were announced by Tesla on March 1. Due to declining sales and fewer subsidies, Tesla significantly lowered the price of the Model Y in a number of European countries.
On Feb. 12. It increased the cost of the Model Y in a few major European markets, but overall they remained lower than before the January reductions. As supply increases, inventory discounts for the new Model 3 are beginning to increase in Europe.
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Is Tesla stock a good buy?
Tesla stock has received a consensus rating of buy. The average rating score is and is based on 45 buy ratings, 33 hold ratings, and 15 sell ratings. What was the 52-week low for Tesla stock? The low in the last 52 weeks of Tesla stock was 151.73. According to the current price, Tesla is 112.83% away from the 52-week low.
Is now a good time to buy Tesla shares?
The electric vehicle leader could have a rough time in 2024. Tesla ( TSLA 1.62%) stock had a great run in 2023, more than doubling in price from $118 to 248. But since the start of 2024, the stock price has slumped by around 20%. So is now a good time to pick up some Tesla shares? For a time, Tesla was on a multiyear winning streak.
Should investors buy Tesla?
Another essential aspect that investors should consider before buying Tesla’s stock is its valuation. Investors should avoid overpaying for any company, even if it has excellent prospects. But it’s better still when one can get a promising stock at a discount, which provides both better upside potential and a margin of safety.
Is Tesla a good stock to buy in June 2023?
Tesla has faced challenges over the past 12 months, but it still has delivered significant returns over the last five years. Between June 1, 2018 and June 1, 2023, Tesla’s stock price increased from $19.06 to $203.93 per share. If you had invested $1,000 in Tesla in June 2018, your investment would have been worth $10,604 in June 2023.