Tesla Inc.’s TSLA recent unveiling of its robotaxi has left investors unimpressed, leading to concerns about the company’s future growth prospects.
What Happened: The lack of clarity surrounding the robotaxi technology has shifted the focus back to Tesla’s core operations, according to Jefferies, reported Investing.com on Monday. This has raised concerns about the company’s governance and funding prospects in the medium term.
Jefferies, while raising Tesla’s price target to $195 from $165, has maintained a Neutral rating. The firm predicts an increase in cash flow over the next two years but warns of “subdued growth” for at least two years due to the aging of Tesla’s core models and the company’s struggle to update its vehicle catalog.
The brokerage expressed disappointment with Tesla’s Cybercab reveal, citing a lack of “tangible progress” on the technology and minimal details on income generation plans. This has refocused attention on Tesla’s core auto business, which is grappling with slowing deliveries and is expected to record its first annual drop in deliveries in 2024.
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Jefferies analysts described Tesla as an “imbalanced VC portfolio solely funded by an auto business under pressure.” The company is set to report its third-quarter earnings on Wednesday. Tesla’s stock took a hit earlier in October following the underwhelming robotaxi reveal and missed third-quarter delivery expectations.
Why It Matters: Tesla’s recent challenges are part of a larger narrative. The company has been offering discounts of up to $4,000 on select Model Y and Model 3 vehicles in the U.S. in a bid to avoid its first-ever decline in annual deliveries.
The company’s third-quarter earnings, which are due to be reported, could provide more insight into demand and the strategy for the upcoming Cybercab.
Some analysts have also noted a shift in focus back to Tesla’s core business fundamentals after Robotaxi Day, suggesting that the company may be redirecting its attention away from the underwhelming robotaxi presentation.
Price Action: Tesla’s stock closed at $218.85 on Monday, down 0.84% for the day. In after-hours trading, the stock slipped an additional 0.16%. Year to date, Tesla’s stock has fallen 11.90%, according to data from Benzinga Pro.
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Photo courtesy: Tesla
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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