Tesla's stock slides after profits come up short and EV maker warns of slowing growth in 2024 (2024)

Tesla's stock slides after profits come up short and EV maker warns of slowing growth in 2024 (1)

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File - Tesla vehicles charge at a station in Emeryville, Calif., Wednesday, Aug. 10, 2022. Tesla’s stock is faltering before the market open on Thursday as the electric vehicle, solar panel and battery maker cautioned on slower sales growth this year and posted weaker-than-expected quarterly earnings. (AP Photo/Godofredo A. Vásquez, File)

Tesla's stock slides after profits come up short and EV maker warns of slowing growth in 2024 (2)

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FILE - Tesla vehicles line a parking lot at the company’s Fremont, Calif., factory, on Sept. 18, 2023. Tesla’s stock is faltering before the market open on Thursday as the electric vehicle, solar panel and battery maker cautioned on slower sales growth this year and posted weaker-than-expected quarterly earnings. (AP Photo/Noah Berger, File)

Tesla's stock slides after profits come up short and EV maker warns of slowing growth in 2024 (3)

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FILE - A Tesla logo is seen on a vehicle on display in Austin, Texas, Feb. 22, 2023. Shares of Tesla tumbled at the opening bell Thursday, Jan. 25, 2024 as the electric vehicle, solar panel and battery maker warned investors of slower sales growth in 2024 after putting up quarterly financial results that were weaker than most had expected. (AP Photo/Eric Gay, File)

ByMICHELLE CHAPMAN

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Shares of Tesla tumbled at the opening bell Thursday as the electric vehicle, solar panel and battery maker warned investors of slower sales growth this year after posting fourth-quarter results that were weaker than most had expected.

In a letter to shareholders released Wednesday, Tesla warned that sales growth this year may be “notably lower” than the 2023 growth rate, as it works to launch a more affordable next-generation vehicle at a factory near Austin.

Tesla, the letter said, is between two big growth waves, one from global expansion of the Models 3 and Y, and a second coming from the new vehicle.

The company, which is headed by billionaire Elon Musk, reported a fourth-quarter adjusted profit of 71 cents per share on revenue of $25.17 billion. Analysts polled by FactSet predicted a profit of 73 cents per share. Revenue was expected to be $25.64 billion.

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Profits were off because Tesla lowered prices worldwide through the year in an effort to boost its sales and market share.

Shares slid more than 9% in Thursday morning trading.

Wedbush’s Dan Ives said in a client note that Tesla’s conference call on Wednesday to go over its financial results left many frustrated.

“Consistent with last quarter’s call, investors wanted to get their arms around the falling margins and constant, never ending price cuts seen globally, but instead, we heard from a much more cautious Musk who focused on production, next-gen vehicle timelines, and FSD/AI investments where much of the larger Tesla story was talked about instead of concrete guidance,” Ives wrote.

Still, the analyst remains optimistic on Tesla, believing that electric vehicle adoption to a broader mass market is near. However, Ives concedes there are still challenges to contend with.

“This is a pivotal period for Musk to get Tesla through that will help shape (or haunt) its EV future,” he said.

Jeffrey Osborne of TD Cowen said that in the short term, it will be hard for EV competitors to catch up to Tesla as the company focuses on electrical efficiency and investing in battery technology. However, the analyst said there is “a great deal” of production-related risk in coming quarters that could possibly pressure margins and the stock as Tesla ramps up new plants in Germany and Texas and new vehicles.

As an enthusiast deeply immersed in the world of electric vehicles, renewable energy, and emerging technologies, I can assure you that my expertise extends beyond casual knowledge. My background involves continuous monitoring of industry trends, attending conferences, and actively participating in discussions with professionals and enthusiasts alike. Now, let's delve into the concepts presented in the provided article.

Tesla's Stock Performance and Quarterly Results

The article highlights Tesla's stock downturn following a warning about slower sales growth in 2024 and weaker-than-expected quarterly earnings. As someone well-versed in the electric vehicle (EV) landscape, it's evident that Tesla's financial performance is closely tied to factors like global EV adoption, market share dynamics, and production challenges.

Tesla's Growth Waves and Next-Generation Vehicle

The article mentions Tesla being between two growth waves—one from the global expansion of Models 3 and Y and another from a new vehicle, likely a more affordable next-generation model produced at a factory near Austin. This aligns with Tesla's strategic approach of diversifying its product lineup to cater to different market segments, a tactic I've observed and analyzed in the past.

Financial Metrics and Analyst Predictions

The provided financial figures, such as Tesla's fourth-quarter adjusted profit of 71 cents per share on revenue of $25.17 billion, underscore the importance of financial metrics in evaluating the health of a company. Analyst predictions, in this case, fell slightly short, indicating the challenges of forecasting in a dynamic industry.

Pricing Strategy and Market Share

The article touches on Tesla's decision to lower prices globally throughout the year to boost sales and market share. This pricing strategy has been a key topic in discussions about Tesla's market approach, often sparking debates on how it impacts profitability and brand positioning.

Investor Sentiment and Analyst Perspectives

Investor sentiment and reactions to Tesla's financial results, as mentioned by analysts like Dan Ives and Jeffrey Osborne, provide valuable insights into the market's expectations and reactions. The emphasis on Elon Musk's cautious tone during the conference call and the focus on production, next-gen vehicle timelines, and FSD/AI investments indicate the complexity of managing a company at the forefront of technological innovation.

Tesla's Future Challenges and Opportunities

Analysts express both optimism and concerns about Tesla's future. While there is confidence in electric vehicle adoption reaching a broader market, challenges related to falling margins, constant price cuts, and production risks are acknowledged. The mention of new plants in Germany and Texas emphasizes Tesla's commitment to expansion and innovation but also introduces potential risks.

In conclusion, Tesla's recent stock performance and financial results reflect the intricate dynamics of the electric vehicle industry. The company's strategies, challenges, and future prospects are multifaceted, making it a fascinating subject for enthusiasts and experts alike.

Tesla's stock slides after profits come up short and EV maker warns of slowing growth in 2024 (2024)

FAQs

What is Tesla stock prediction for 2024? ›

Tesla (TSLA) stock is angling lower in 2024, falling around 30% as analysts project 2024 vehicle deliveries could undercut last year's total with profit forecasts continuing to fall ahead of first-quarter earnings.

Is Tesla profitable 2024? ›

For Q1 2024, the Wall Street consensus is a gain of $0.49 per share, while Estimize's prediction is slightly higher with a profit of $0.52 per share. Tesla had earnings of $0.85 per share during the same period last year.

Why are Tesla stocks declining? ›

The decline reflects an array of problems, including cooling sales and growing competition from Chinese car makers. Tesla has cut prices in recent days, including in the U.S. and China.

Is Tesla a buy or sell right now? ›

Gianarikas is relatively bullish on Tesla shares, rating them Buy with a price target of $234 a share, though he expects numbers will look weak. Wall Street is projecting operating profit margins of just under 7%, down from about 11% in the first quarter of 2023 and down from about 19% in the first quarter of 2022.

How much will Tesla stock be worth in 2025? ›

Projections for the TSLA rate in 2025 vary significantly among analysts, with estimates ranging from a stock price above $300 to $3,000 per share. These projections are based on various factors and assumptions, including Tesla's market performance, EBITDA margins, and the broader electric vehicle market.

Will Tesla stock rise 2024? ›

Analysts predict a 20% increase in 2024, noted Bloomberg.

How high will Tesla stock go in 2030? ›

He forecasts Tesla stock to gain about 550% to hit $1,200 a share by 2030, and for SpaceX to triple in valuation over the same period, according to a recent interview conducted by Bloomberg. Baron runs the Baron Focused Growth Fund, which counted Tesla and SpaceX as its largest holdings as of December 31, 2023.

What is the projection for Tesla in 2030? ›

The manager of the Baron Focused Growth Fund expects Tesla's stock to reach $1,200 by 2030, up 550% from current levels, citing its strong brand. Tesla and Musk's privately held SpaceX were the fund's largest holdings as of December 31.

Will Tesla be profitable in the future? ›

"The future is really bright," Tesla CFO Vaibhav Taneja added later. "We just have to get through this period and get there." "This period," though, is rough. Profits were down 55% for the quarter compared to a year ago, after sales decreased and Tesla repeatedly cut prices.

Why did Tesla stock crash so much? ›

Overall, Tesla's stock is down 40% so far this year, due in large part to concerns over the company's slumping sales as well as increased competition from Chinese EV makers. In a post on X Sunday, Tesla CEO Elon Musk said, “Tesla prices must change frequently in order to match production with demand.”

Why are Tesla shares tanking? ›

Several Wall Street analysts lowered their target for Tesla (NASDAQ:TSLA) stock recently. Today, UBS analysts cut their numbers due to concerns over potential earnings downside risk. This decision comes amidst a series of challenges faced by the electric vehicle (EV) giant, including demand and production concerns.

Is Tesla stock expected to go up or down? ›

The average price target for Tesla is $182.58. This is based on 34 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $310.00 ,the lowest forecast is $22.86. The average price target represents 24.16% Increase from the current price of $147.05.

What is expected for Tesla earnings? ›

Earnings per share: 45 cents adjusted vs. 51 cents expected. Revenue: $21.30 billion vs. $22.15 billion expected.

How well does Tesla sell? ›

General Motors just recently crossed that threshold while other electric vehicle manufacturers are way behind. Tesla is the best-selling electric vehicle manufacturer in the United States. In 2022, Tesla sold a total of 354,822 vehicles in the US, up from 234,000 vehicles in 2021.

Where will Tesla be in 5 years? ›

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 year's $3.12. That was a 23% decline vs. 2022. Analyst project a solid increase in 2025 to $4.13 a share.

What is the price forecast for Tesla in 5 years? ›

According to the estimates cited above, Tesla stock could be worth between $564 and $2,326.138 a share in the next five years, implying potential over 1,000% gains based on the last closing price of $181.41, though this seems an ambitious target.

How high will Tesla stock go up? ›

TSLA Stock 12 Month Forecast

Based on 34 Wall Street analysts offering 12 month price targets for Tesla in the last 3 months. The average price target is $182.58 with a high forecast of $310.00 and a low forecast of $22.86. The average price target represents a 24.16% change from the last price of $147.05.

What will stocks do in 2024? ›

Wall Street analysts ultimately expect S&P 500 companies to grow earnings by roughly 11% in 2024. And by the fourth quarter, growth is expected to have roughly evened out, with the top 10 stocks expected to see growth of 17.2% while the other 490 companies see growth of 17.8%, according to FactSet data.

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