Tesla (NASDAQ: TSLA) is losing power as an electric vehicle manufacturer, resulting in falling margins and slowing revenue growth. But one company continues to make billions in cash, and it's buying back a huge chunk of its shares. In this video, Travis Hoium highlights that stoc
Nio (NYSE: NIO) has taken investors on a wild ride since its public debut. The Chinese electric vehicle (EV) maker went public at $6.28 per American depositary share (ADS) on Sept. 12, 2018, and its shares rallied to an all-time high of $62.84 on Feb. 9, 2021. At its peak, Nio's
U.S. stock index futures were subdued on Tuesday, with investors now awaiting a peak in the earnings season and economic data in a major test for Wall Street's sustenance of a recent rally that saw the S&P 500 scale record highs and enter a bull market.
Electric vehicles (EVs) are approaching an industry crossroads. Battery range is arguably the biggest obstacle to EV adoption today, and traditional lithium-ion batteries are potentially topping out.
Tesla (
NASDAQ:TSLA
) will release its financial results for the fourth quarter of 2023 after the market closes on Wednesday, January 24. While higher deliveries will support its top-line growth, the
electric vehicle (EV) giant’s bottom line could remain under pressure due to the lower average selling prices compared to the prior year.
It’s worth noting that Tesla is
reducing prices to help support deliveries amid a challenging operating environment. The excitement surrounding the EV market has waned due to macroeconomic challenges. Additionally, the EV sector is experiencing heightened competition, which is pressurizing margins.
Against this background, let’s look at the Street’s expectations for TSLA's Q4.
Tesla – Q4 Expectations
Wall Street expects Tesla to report revenue of $25.63 billion in Q4, representing a
year-over-year growth of 5.4%. Higher automotive sales revenue, led by
increased deliveries, will support its top-line growth. However, an overall price reduction and adverse sales mix could adversely impact its top-line growth rate.
While Tesla’s top line is likely to improve, its bottom line could continue to decline due to the reduction in the average selling price of its vehicles. Nonetheless, the decline in material and manufacturing costs and the company’s cost-reduction efforts will cushion its margins. Notably, analysts expect Tesla to post
earnings of $0.73 per share in Q4, down 38.7% year-over-year.
Analysts' Ratings Ahead of Q4 Print
On January 22, Morgan Stanley analyst Adam Jonas lowered Tesla’s price target to $345 from $380, citing a slowdown in demand. Nonetheless, Jonas maintained the Buy rating on Tesla stock.
In a similar move,
Barclays analyst Dan Levy cut Tesla’s price target to $250 from $260 and reiterated a Hold rating on January 17. The analyst expects Tesla to face volume headwinds amid softening demand.
Is Tesla a Buy or Sell Now?
Despite macro headwinds, Tesla stock has gained over 45% over the past year. However, its margins have consistently declined in the first three quarters of 2023, keeping analysts sidelined.
Overall, Tesla stock has nine Buy, 10 Hold, and four Sell recommendations for a Hold consensus rating.
Analysts’ average price target of $248 implies 18.77% upside potential from current levels.
Insights from Options Trading Activity
While analysts are sidelined about TSLA stock,
options traders are pricing in a +/- 7.09% move on earnings, smaller than the previous quarter’s earnings-related move of -9.3%.
The anticipated move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
Learn more about TipRanks’ Options tool here.
Bottom Line
Tesla’s focus on increasing its vehicle production and delivery capabilities, reducing costs, and improving battery technologies augurs well for long-term growth. However, near-term margin headwinds and soft demand remain concerns.
Disclosure
Riyadh has spent billions to try to turn itself into a hub for electric vehicles and overcome obstacles including a lack of infrastructure, talent and raw materials, as it seeks to catch up in the global race to reap the profits of the new industry.
Legacy automakers playing catch-up with EV leaders like Tesla are leaning on their Formula E electric racing teams for innovations to build better mass-production EVs with greater range and efficiency, or a lower price tag.
What you need to know… The S&P 500 Index ($SPX ) (SPY ) on Monday closed up +0.22%, the Dow Jones Industrials Index ($DOWI ) (DIA ) closed up +0.36%, and the Nasdaq 100 Index ($IUXX ) (QQQ ) closed up +0.09%. Stocks on Monday settled moderately higher, with the...
The S&P 500 posted a second straight record high close on Monday as tech stocks added to recent gains and investors awaited upcoming corporate reports for clues on this year's profit outlook.
For meme-token investors, Dogecoin (CRYPTO: DOGE) remains the gold standard most pay close attention to. Initially created in 2013 as a joke by founders Billy Markus and Jackson Palmer, this cryptocurrency has seen an impressive community grow in recent years, culminating in note
Tesla TSLA will be one of the heavy hitters reporting earnings this week with the auto giant scheduled to release its fourth quarter financial results on Wednesday, January 24.
The S&P 500 hit a record high close for a second straight session on Monday as tech stocks added to recent gains and investors awaited upcoming corporate reports for clues on this year's profit outlook.
Want to start the week ahead of the pack? Check out Momentum Mondays, where I cover the leading breakout stocks in the market, summarize the major events of the week ahead, and prepare investors for profitable trading.
The S&P 500 rose to another record high on Monday as tech stocks added to recent gains and investors awaited upcoming corporate reports for clues on this year's profit outlook.
The worst performing sector as of midday Monday is the Utilities sector, showing a 0.6% loss. Within the sector, Sempra (Symbol: SRE) and Evergy Inc (Symbol: EVRG) are two of the day's laggards, showing a loss of 1.9% and 1.2%, respectively. Among utilities ETFs, one ETF foll
The benchmark S&P 500 scaled a fresh record high on Monday,
extending a bull-market run into a new week on a boost from some
megacap and chip stocks, while corporate earnings and clues on
interest-rate cuts continued to top investors' radar.
Lucid Motors stock fell to record lows last week amid the meltdown in EV names, and now looks like a growth stock worth scooping up, despite the higher risks.
Lucid (NASDAQ: LCID) stock is climbing in Monday's daily session. The company's share price was up 3% as of 11:30 a.m. ET, according to data from S&P Global Market Intelligence. Meanwhile, the S&P 500 index was up 0.3% and the Nasdaq Composite index was up 0.5%.
Up through last week, information pertaining to stock market moves have largely come from economic data and the Fed’s interpretation of it, year to date. This week, with the next Federal Open Market Committee (FOMC) meeting schedu