How did TSLA's Q1 2025 EPS forecast compare to past trends?

Tesla's (TSLA) Q1 2025 EPS forecast is expected to decline to $0.46, which would be the lowest mark since Q2 of 2021. This indicates a downward trend in earnings compared to the previous year's first quarter. Here's a detailed analysis:

1. Recent Performance and Forecasts:
   • Tesla's stock has experienced a significant decline of nearly 36% since mid-February, leading many to consider buying the dip.
   • The consensus among analysts for Q1 2025 EPS is $0.46, reflecting a substantial decrease from the previous year's EPS.
2. Comparing with Past Trends:
   • The 5-year EPS CAGR for Tesla is 39.0%, indicating a strong historical growth rate.
   • However, the current forecast for Q1 2025 suggests a sharp decline in earnings, which is at odds with the company's typical performance during this time of year.

3. Factors Influencing the Decline:
   • Production issues with the Model Y design changeover and global brand backlash have impacted deliveries and profitability.
   • Increased competition, an aging vehicle lineup, and negative brand sentiment have contributed to the sales slowdown.
4. Analyst Perspectives:
   • Analyst Adam Jonas from Morgan Stanley has reduced his delivery forecasts for Q1 and FY2025, citing factors such as increased competition and negative brand sentiment.
   • Another analyst, Maja Hitij, expects deliveries to be lower than anticipated, with a possible year-over-year drop of more than 20%.
5. Market Sentiment and Future Outlook:
   • Despite the current challenges, Tesla remains optimistic about future growth, with CEO Elon Musk predicting that profits could increase by 10 times over the next 5 years.
   • The company's focus on cost reduction and technology improvements, along with the potential introduction of new models, could support its expansion.

In conclusion, Tesla's Q1 2025 EPS forecast reflects a significant challenge for the company, with earnings expected to decline despite past growth trends. The automotive industry is highly competitive, and Tesla faces numerous challenges, including production issues, brand backlash, and increased competition. However, the company's long-term strategy and potential new product introductions could mitigate these challenges and support future growth.