Tesla (TSLA:NSD) Analysis: Stock Drops as Poor Earnings Cast Concerns on Outlook

Tesla (TSLA:NSD) Analysis: Stock Drops as Poor Earnings Cast Concerns on Outlook

Stock Analysis After Earnings Miss

Tesla Inc (TSLA) – Earnings Analysis – January 25, 2024

Financial Snapshot:

  • Last Price: $192.63 USD (as of January 25, 2024)
  • Fair Value Estimate: $200.00 USD (as of January 25, 2024)
  • Price/Fair Value: 1.04
  • Market Cap: $664.84 USD Billion (as of January 24, 2024)

Key Metrics:

  • Economic Moat: Narrow
  • Equity Style Box: 3 Large Growth
  • Uncertainty: Very High
  • Capital Allocation: Exemplary
  • ESG Risk Rating Assessment: Not provided

Fair Value and Profit Drivers (as of January 24, 2024):

  • Fair Value Estimate: Morningstar Reduced to $200 per share from $210.
  • Strategic Shift: Emphasis on developing an affordable SUV and cost cuts for existing vehicles.
  • Near-Term Outlook: Lower near-term deliveries growth and lower near-term automotive gross profit margins.
  • Stock Reaction: Tesla shares down 12% in trading.

Analyst Note – Seth Goldstein, CFA, Strategist (January 25, 2024):

  • Strategic Shift: Tesla shifts focus to the development and ramp-up of an affordable sport utility vehicle while implementing cost cuts for existing vehicles.
  • Market Reaction: Market reacts negatively to the outlook of lower growth in 2024, resulting in a 6% decrease in Tesla shares.
  • Fair Value Adjustment: Fair value estimate adjusted to $200 per share from $210 due to updated forecast.
  • Recommendation: Shares viewed as fairly valued; Investors advised to wait for a solid margin of safety before considering an entry point.

Business Strategy & Outlook 

  • Market Position: Tesla is a major player in the battery electric vehicle market, globally recognized for its luxury and entry-level vehicles.
  • Competition: Competes in the luxury car and midsize crossover SUV markets with Model S, Model X, Model 3, and Model Y. Also offers the Cybertruck, a light truck, and a semi-truck.
  • Expansion: Opened two new factories in 2022 to increase production capacity.
  • Investment: Allocates around 4% of sales to research and development, emphasizing technology enhancement and cost reduction.
  • Future Goals: Aims to launch an affordable SUV and sports car in the coming years, focusing on retaining market leader status as electric vehicles gain mass consumer adoption.

TSLA Ratings by Stock Target Advisor

Tesla Stock Forecast

The stock forecast for Tesla Inc (TSLA) provided by 20 analysts indicates an average target price of USD 263.86 for the next 12 months. This target reflects the consensus among financial experts on the expected future valuation of Tesla’s stock. The accompanying average analyst rating for Tesla is “Buy,” suggesting a positive sentiment regarding the company’s future performance.

Stock Target Advisor, an independent analysis entity, also offers its assessment, categorizing Tesla’s stock as “Slightly Bullish.” This designation is derived from a comprehensive analysis considering 10 positive signals and 5 negative signals related to various aspects of Tesla’s financial health, market positioning, and other relevant factors.

As of the latest closing, Tesla Inc’s stock was priced at USD 207.83. The recent performance of the stock shows fluctuations:

  • Over the past week, there was a decrease of -3.58%.
  • Over the past month, the stock experienced a decline of -17.70%.
  • However, when considering a longer timeframe, the stock has demonstrated significant growth, increasing by +43.90% over the last year.

Investors and analysts closely monitor these indicators to assess the current market sentiment and potential investment opportunities. The positive long-term performance suggests that Tesla has experienced substantial growth over the past year, despite recent short-term fluctuations.

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