Tesla Slips to Fourth in WSB Ranking Amid Earnings Anticipation and Market Challenges
1min read In the latest Wall Street Bets (WSB) ranking, Tesla has slipped to fourth, down one place from the previous day. The company's stock has seen a 0.40% decline, falling for four consecutive days with a cumulative drop of 1.52% over this period.
Investors are eagerly anticipating Tesla's third-quarter earnings report, set to be released post-market today. This comes on the heels of a lackluster Robotaxi event, drawing attention back to Tesla's fundamentals: core automotive and energy storage demand, performance, and guidance. Key focus areas include Cybertruck production, potential new models, global FSD deployment, and collaboration with the AI startup xAI.
Tesla has underperformed the broader market and other giants this year, with its stock down over 12%, closing Tuesday with a market cap of $696.3 billion, while the S&P 500 has gained nearly 23% in the same span.
Analysts project Tesla’s Q3 revenue at $25.4 billion, a 9% year-on-year growth. However, adjusted net profit is expected to decline by 11%, echoing a 23% drop in earnings per share to $0.51. The growth is largely driven by global electric vehicle market recovery and price-for-volume strategies, including zero-interest initiatives in China and limited-time offers in North America.
Tesla's Q3 deliveries slightly missed expectations, reaching 462,890 vehicles. Yet, further steps such as slashing Model 3 and Model Y prices in China and the US suggest continued reliance on sales incentives. Positive performance is seen in the Chinese market, though the holistic outcome remains uncertain.
Expectations suggest Tesla may deliver around 1.8 million vehicles this year. However, profitability concerns arise due to subsidies, Cybertruck production challenges, and new model/FSD development costs.
Wedbush analysts emphasize the importance of profit margin trends, projecting an adjusted EBITDA margin of about 15% for the second half of the year, rising to 20% by 2025.
Barclays analysts focus on fundamentals, including potential impacts from salary reductions and vigor in the energy storage sector. Opinions diverge on the introduction of a lower-cost Model 2, as Tesla assesses resource allocation between economy models and autonomous driving.
Regarding FSD and xAI collaborations, Tesla plans to launch FSD in China and Europe in early 2024, but regulatory alignment remains a hurdle. While Tesla is positioning as an AI-centric company, full commitment with xAI is still seen as secondary.
The Tesla saga continues as market participants debate its trajectory, weighing fundamental resilience against ambitious futuristic endeavors.
