Leading electric vehicle company Tesla Inc TSLA is set to report first-quarter financial results on April 23, which comes after recent layoff news sent shares lower.
A leading tech analyst weighs in on the impact the first quarter could have on Tesla and its stock.
The Tesla Analyst: Wedbush analyst Dan Ives has an Outperform rating on Tesla and a price target of $300.
Related Link: Tesla Stock Rescue Plan: Analyst Lays Out 10 Items For Musk To Consider Including AI, Buyback, Acquisitions
The Analyst Takeaways: The first quarter earnings report and subsequent conference call could be a "moment of truth" for Tesla and CEO Elon Musk, Ives said.
"Next week's conference call and messaging one of the most important moments in the company's history in our view," Ives said.
The analyst said Tesla has faced difficult times in the past, naming the 2015, 2018 and 2020 years as examples. Without a new strategy outlook on the conference call, Ives said there could be "darker days" ahead.
"This time is clearly a bit different as for the first time many long-time Tesla believers are giving up on the story and throwing in the white towel," he added.
Ives said demand erosion in China has hurt the bull thesis on Tesla stock. A debate over whether the company should prioritize robotaxis or the Model 2 has also weighed on the stock, the analyst said.
"Global EV landscape that has turned Tesla from a Cinderella story to a horror show in the near-term."
Ives said most analysts and investors are expecting a rough first quarter, what he calls a "rip the band-aid off quarter." The analyst said it's still important the company conveys the future of the company and tries to change the narrative of the story during this tough time.
Here are five key issues Ives believes should be addressed by Musk:
- Negative growth trend in China, pricing strategy for the region
- 2024 outlook for growth, free cash flow and margins
- Model 2 update
- Tesla artificial intelligence initiatives
- Announce an AI Day
On point three, Ives said a second growth wave will not come for Tesla if the Model 2 is not a priority to come out in the next 12 to 18 months.
"Trading in Model 2 for robotaxis would be a tragic gamble in our opinion as full autonomy we do not see until 2030 for the industry. Musk needs to recommit to the Model 2 strategy ALONG with robotaxis but it CANNOT be solely replaced by autonomy."
Ives said Tesla is "one of the most disruptive companies in the world" and he's always had a long-term outlook on the company.
"HOWEVER the clock has struck midnight for Musk to lay out the strategic plan for the future."
TSLA Price Action: Tesla shares trade at $150.46 on Friday versus a 52-week trading range of $148.10 to $299.29. Shares of Tesla are down 39.7% year-to-date in 2024.
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