As a leading electric vehicle (EV) manufacturer, Tesla's stock has attracted the interest of both bulls and bears, driven by factors such as earnings, revenue, and the global demand for electric vehicles. TSLA is set to report its fourth-quarter earnings tonight after the close. Investors are eagerly awaiting the results, as they are focused on the company's global demand for EVs and the profitability of its automobiles.
Tesla has been the top-selling EV brand worldwide in 2023, but China's BYD overtook Tesla in the fourth quarter. Additionally, some early-stage EV companies are struggling, emphasizing the competitive landscape.
Analysts forecast that Tesla's earnings per share (EPS) for the quarter will be $0.74, representing a decline of 37.8% compared to the previous year. Revenue is expected to reach approximately $25.88 billion, a year-over-year increase of 6.7%.
One of the key factors that investors will be watching closely is Tesla's gross profit. Analyst assessments indicate various gross profit figures, including those related to the automotive and energy generation and storage segments. However, the big number to watch is the gross auto margin excluding zero emission vehicle credits, which is estimated to be 15.7% for Q4. This represents a decline from the previous quarters due to pricing pressures, particularly in China, where Tesla has faced immense competition and has had to reduce prices. Gross auto margins excluding zero emission vehicle credits estimates at 15.7 % for Q4, compare to 16.3% in Q3, 18.1% in Q2, and 19.0% in Q1.
Tesla's quarterly gross profit margin as of September 30, 2023, was reported at 17.89. It will be important to analyze the margin trends for the recent quarter to assess the impact of pricing pressures and increased competition on Tesla's profitability.
Tesla's 2024 deliveries outlook are a crucial aspect to consider. Analysts expect the company to deliver approximately 2.1 million vehicles in 2024, although it remains to be seen if the company will provide this specific guidance. The number of deliveries will provide insight into Tesla's production capabilities and growth trajectory.
The average price target for Tesla is $241.10, which is 11.85% higher than the current price. This suggests that analysts remain optimistic about the company's growth potential and believe that the stock is undervalued.
In terms of market performance, Tesla's stock has gained 45% over the past 12 months, despite experiencing a pullback in January. This highlights the market's confidence in Tesla's long-term prospects, despite short-term challenges.
Analysts' comments on Tesla's upcoming earnings call provide further insight into the debate between bulls and bears. Some analysts expect Tesla's 2024 outlook to be cautious on both volume and profitability, considering the current state of the EV market. Others believe that Tesla should focus on maintaining price and margin stability amidst increased competition and a potential oversupply of EVs. Ultimately, the company's strategic decisions and ability to adapt to market dynamics will be critical in determining its future success.
Gene Munster, an analyst from Loup Ventures, tweeted about the potential announcement of a compact crossover in the first half of 2025, which could pose a challenge to differentiate its price point from the Model 3 and Model Y.
Other areas of interest include the cyber truck and Elon Musk"s compensation package. The company started delivering its much-anticipated Cybertruck late last year. It does not break out this number but investors will look for color on how early sales are progressing. Tesla CEO Elon Musk recently revealed his demand for a new, larger compensation package.
Tesla's fourth-quarter earnings report will shed light on the company's growth potential and investment value. Key factors to consider include earnings per share, revenue growth, gross profit margins, short interest, and the average price target.
The global demand for EVs and Tesla's profitability amidst competition and pricing pressures will shape the analysis. As investors navigate the evolving EV landscape, it is crucial to carefully assess the information provided and make sound financial decisions based on a thorough understanding of Tesla's investment potential.