Leading electric vehicle company Tesla Inc TSLA reported fourth-quarter financial results after market close Wednesday.
The company missed revenue and earnings per share estimates from analysts. Here's a look at what analysts are saying after the latest financial report.
The Tesla Analysts: RBC Capital analyst Tom Narayan has an Outperform rating and lowers the price target from $300 to $297.
- Roth Capital analyst Craig Irwin has a Neutral rating and $85 price target.
- Truist analyst William Stein has a Hold rating and lowers the price target from $227 to $193.
- Needham analyst Chris Pierce has a Hold rating and no price target.
RBC Capital on Tesla: Vague guidance on deliveries for 2024 was a key item in the fourth quarter results for Narayan.
"We leave our delivery estimates unchanged after the vague guide, but lower our car gross margin expectations on less robust cost down opportunity," Narayan said.
The analyst noted that the next-gen vehicle platform has begun to come into focus, but remains several quarters away "from impacting numbers."
"For the first time, the company said that it is approaching the natural limit of cost down opportunity within its existing vehicle lineup."
Narayan has a sum of the parts price target of $293, which consists of $19 for the cars business, $211 for the Robotaxi and $66 for FSD.
Roth on Tesla: Tesla's vehicle growth could be weak until the next-gen vehicle comes, Irwin said.
"Tesla reported weak 4Q23 results and the sixth sequential quarter of adjusted auto gross margins down Y/Y," Irwin said.
The analyst said the company's guidance for lower vehicle delivery growth "wasn't a big surprise."
"Mgmt is now leaning on the next-gen vehicle, presumably the MiniCar, to re-initiate growth in '25 where the new modular manufacturing approach broadly elevates platform execution risk."
The analyst sees pressure coming on the company and its shares from lower margins and lower delivery growth.
"We continue to see Tesla's stock as egregiously overvalued. The current market valuation appears to rest on the assumption that the hundreds of EVs slated for launch by 2025 will all be flops."
Truist on Tesla: The fourth quarter report and updates from Tesla were mostly negative, according to Stein.
"TSLA remains between two waves of growth, making it difficult to own for now," Stein said.
The analyst said volume growth will be notably lower and margin recovery could continue to be pressured.
"We believe the most important takeaway from today's call was Tesla's 2024 vehicle growth guidance that expects ‘notably lower’ unit growth than in 2023."
The analyst expects Tesla to have 2024 deliveries of 2.2 million units, lowering the forecast from 2.3 million units.
"The revisions to FSD and the lack of visibility in Dojo make it incrementally difficult to get optimistic about the stock until we get closer to the release of the next-gen vehicle."
Needham on Tesla: Gross margins declined year-over-year in the fourth quarter and expectations from analysts on future automotive gross margins could be aggressive given the price cuts, Pierce said.
"We would view stable vehicle prices and an improvement in days of vehicle supply bullishly," Pierce said.
The analyst said Tesla's vehicle guidance and being-between-growth-waves comments were not surprising.
The key item from the fourth quarter for Pierce is the company's cost of goods sold.
"We see this as likely the main talking point post the release and are viewing it as largely new and supportive of the thesis underpinning our Hold rating."
The analyst said Needham remain "sympathetic" to the long-term bull case on Tesla stock.
"However, TSLA's valuation premium was easier to justify when looking at its margin on an absolute level vs peers."
TSLA Price Action: Tesla shares are down 10% to $187.24 on Thursday, versus a 52-week trading range of $152.37 to $299.29.
Read Next: Here's How Many Vehicles Tesla Has Delivered, Produced In Each Quarter Since 2019
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