For Immediate ReleaseChicago, IL – January 24, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured
The NASDAQ 100 Pre-Market Indicator is down -84.71 to 11,787.83. The total Pre-Market volume is currently 39,264,877 shares traded.The following are the most active stocks for the pre-market session: Tesla, Inc. (TSLA) is -0.91 at $142.84, with 3,757,285 shares traded.TSLA is sc
Many investors have opinions on Tesla's (NASDAQ: TSLA) stock. There are many bulls, but there are also many bears. This video highlights both sides of the argument for Tesla's stock as an investment.
Lucid Group (NASDAQ: LCID) continues to be a market-darling electric vehicle (EV) stock, but it may not have the momentum investors think. In this video, Motley Fool contributor Travis Hoium highlights how the company has lost reservation holders in the last quarter and may lose
Not all great investments get headlines in the paper or online. Some companies are generating value for investors with little fanfare. In this video, Travis Hoium and Lou Whiteman discuss three stocks you may have overlooked because they get little fanfare.
Elon Musk will take the stand on Tuesday in San Francisco, after telling a jury on Monday that he had locked up financial support in 2018 to take his electric car maker Tesla Inc private.
Tesla's (NASDAQ: TSLA) stock price has bounced back somewhat from its recent lows, but was recently battered after the automaker cut prices of its most popular models, the Model Y and Model 3.
Pumped-up hopes for U.S. tech sector earnings in a heavy week for corporate updates generally have twinned with the latest sign Europe may have dodged a winter recession.
Billionaire Elon Musk said in a tweet that the advisers that help guide shareholders on how to cast their votes at meetings of publicly traded companies had "far too much power", without citing specific examples.
Honda Motor Co said on Tuesday it would create a new division in a bid to strengthen and speed up its electrification business as part of an overhaul of its organisational structure.
Wall Street closed sharply higher on Monday, fueled by surging technology stocks as investors began an earnings-heavy week with a renewed enthusiasm for market-leading momentum stocks that were battered last year.
Wall Street ended sharply higher on Monday, powered by surging technology stocks as investors began an earnings-heavy week with a renewed enthusiasm for market leading momentum stocks that were battered last year.
About 19% of all cars sold in California last year were zero-emission vehicles (ZEVs), accounting for 40% of all ZEV sales including hybrid vehicles in the United States, data showed.
Wall Street surged on Monday, led higher by technology stocks as investors embarked on an earnings-heavy week with a renewed enthusiasm for market leading momentum stocks that were battered last year.
What happened
About 10 days ago, I wrote about how Tesla (NASDAQ: TSLA) was cutting its electric vehicle (EV) prices. I argued that Tesla wasn't doing so just because it wanted to boost demand for its vehicles, but rather to ensure that more people buying them would be able to cl
About 19% of all cars sold in California last year were zero-emission vehicles (ZEVs), accounting for 40% of all ZEV sales in the United States and leading other U.S. states in EV adoption, data showed.
EV maker Tesla (
NASDAQ: TSLA
) had a tumultuous 2022, falling nearly 65%, but
the stock has recovered as of late. The price cuts on its top-selling models at the start of the month have boosted sales, driving investors’ interest back into the stock. Given its revenue growth prospects and relatively low share price, I am bullish on the stock at current levels.
Interestingly, TSLA stock has a very positive signal from hedge fund managers, who
added 1.1 million shares during the last quarter. In fact, well-known investor
Catherine Wood, CEO of Ark Investment Management, recently bought TSLA stock. On January 13, Wood’s Ark Innovation ETF reported a purchase of 168,989 shares of Tesla worth $20.7 million.
Tesla's Price Cuts Boost Sales
On January 6, Tesla announced
price cuts in the range of 6% to 13.5% for all variants of its Model 3 and Model Y cars in China. On top of that, last week, the EV maker took its bold steps further by slashing its prices in major markets like the U.S. --
by around 20% -- and Europe.
As intended by the company, the price cuts massively boosted the sales of Tesla vehicles. According to a China Merchants Bank International (CMBI) study, average daily sales for Tesla in China during the period between Jan 9-15 soared 76% year-over-year to 12,654 vehicles. Compared on a weekly basis, Tesla China EV registrations rose 500% to 12,654 during the same week, compared to merely 2,110 reported in the prior week.
The price cuts raised concerns in investors' minds about demand trends amid toughening competition and macroeconomic headwinds. Further, they may lead to the compression of
Tesla's profit margins, but let’s understand the underlying reason for such an aggressive move made by Tesla.
First, there was a visible slowdown in EV demand over the last few months. On the supply side, things look better now with input prices coming down. On top of that, government incentives -- like the $7,500 EV tax credit announced in the Inflation Reduction Act -- gave one more reason for Tesla to cut prices (in order to meet the eligibility criteria for tax benefits.)
Looking at the pricing metrics, the average selling price for Tesla cars was high, at over $50,000 in December, higher than many of its peers. Therefore, the price cut was inevitable. Even after the price cuts, the cars continue to remain expensive compared to competitors.
It seems like a price war has just begun in the EV industry. After TSLA cut its prices in early January, Xpeng Inc. (
NASDAQ:XPEV
) followed in its footsteps,
slashing the price of its best-seller P7 sedan by 12.5% to $31,015. Therefore, I believe it is likely that other industry players like NIO (
NYSE:NIO
) and Li Auto (
NASDAQ:LI
) will also announce price cuts in the coming months.
TSLA Had a Challenging 2022 but Still Reported Upbeat Results
Prolonged lockdowns in China in 2022 led to a massive drop in production, affecting companies like Tesla. Demand suffered, too, due to challenging macroeconomic conditions while competition from Chinese EV makers intensified. Due to the above factors, for December, Tesla reported a 44% slump in Chinese EV deliveries to 55,796 when compared to November deliveries of 100,291. Further, on a year-over-year basis, December deliveries fell 21%.
Importantly
, Tesla lost some of its market share to competitors during the fourth quarter. Tesla’s vehicles represented 65% of new EV sales in 2022 versus 72% in 2021. In the U.S., its market share dropped to 58% during Q4, compared to 78% in the prior-year quarter, despite the 50% growth reported in overall volumes.
Further, CEO
Elon Musk’s prolonged tussle with lawmakers over the acquisition of Twitter didn’t go well with many investors. Investors may be worried about Elon Musk selling more TSLA shares like he did in recent months. Addressing those issues, he stated recently that he would not sell any more TSLA shares.
Despite all the bears pulling the stock down in 2022, it is worth praising that Tesla has consistently reported
estimate-beating results in the past seven quarters, and, importantly, the company is due to release its Q4 results on January 25.
Is Tesla Stock a Buy, According to Analysts?
As per TipRanks, analysts are cautiously optimistic about TSLA stock and have a Moderate Buy consensus rating based on 17 Buys, eight Holds, and three Sells.
Tesla’s average price forecast of $187.32 implies 30.4% upside potential.
Conclusion:
Consider Buying Tesla Stock
EV penetration the world over has continued to grow, with newer models being introduced by leading EV makers. In the U.S., EV penetration of new car sales reached 6% in 2022 compared to 3% in 2021.
Tesla’s price cuts have put its competitors in a tough situation, as they may need to follow suit. The company has a strong cost advantage (a high gross profit margin of 26.6% relative to competitors), and its price cuts could immediately boost sales significantly, making up for the lower prices.
Net-net, looking at Tesla's growth prospects amid its price cuts, I’m bullish on the stock.
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Disclosure
U.S. stock indexes rose on Monday, with the Nasdaq jumping nearly 2%, as gains in shares of chipmakers helped ease pressure on the battered technology sector at the start of another big week for corporate earnings.