add Barrons to the VicChitList lol:- Why Tesla Stock Has Passed Its Peak Peter Cohan Senior Contributor Oct 20, 2023,09:52am EDT TSLA -1.9% stock has fallen 46% from its peak price of $407 a share in November 2021. Here’s why its shares will fall further: Failure to deliver expected revenue and earnings results Trouble with its Cybertruck model Fear of betting on lower-cost cars Price cuts fail to boost sales False hope for a surge in self-driving cars Tesla expressed concern about cutting its costs low enough to make its vehicles affordable. “I’m worried about the high interest rate environment we’re in,” Tesla CEO Elon Musk said in the earnings call, according to CNBC. “If interest rates remain high or if they go even higher, it’s that much harder for people to buy the car. I just can’t emphasize enough how important cost is. …. We have to make our products more affordable so people can buy it,” Musk concluded. Failure To Deliver Expected Results Tesla’s third quarter report fell short of expectations on many dimensions, including the following: Revenue: $23.4 billion, versus $24.1 billion expected, CNBC reported. Earnings per share: 66 cents, versus 73 cents per share expected, according to CNBC. Q3 Deliveries: 435,059 a figure well below expectations and down 6% vs. Q2, according to Investor’s Business Daily. Price cut on model 3 RWD: $1,250 to $38,990, IBD reported. Price cut on Model Y Long Range: $2,000 to $48,490, noted IBD. Gross profit margin: 17.9% — 0.3 percentage points lower than analysts’ consensus, according to FactSet. CNBC attributed this to Tesla “aggressively [cutting] vehicle prices throughout the year.” Two analysts view the Q3 report as evidence Tesla’s stock is overvalued. To justify Tesla’s stock price, investors have to believe it “can achieve very high volumes and high operating margins, akin to technology or software companies, not traditional auto companies,” Sanford C. Bernstein analyst Toni Sacconaghi told Bloomberg. Trouble With Cybertruck Tesla shared disappointing news Wednesday regarding its Cybertruck model. Although the company said in the earnings call that it “remains on track for initial deliveries this year” starting November 30, Musk told investors, “It will take a year to 18 months before it is a significant positive cashflow contributor,” CNBC reported. Musk estimated Tesla will reach 250,000 Cybertruck units produced per year “sometime in 2025.” Despite imminent shipments, the company “still hasn't released prices or key specs that would affect Cybertruck demand and profitability,” CNBC noted. Tesla’s slow Cybertruck progress means “Tesla’s car business faces leaner times well into 2024,” the Wall Street Journal reported. Fear Of Betting On Lower-Cost Cars Tesla is blaming high interest rates for putting the brakes on its next-generation vehicle. Since an early March investor day, Tesla had not said much about its progress developing a lower-priced vehicle at a new plant in Mexico, the Journal reported. Musk told investors October 18 Tesla is slowing down this initiative. As he told investors, “We want to get a sense for what the global economy is like before we go full tilt on the Mexico factory. If interest rates start coming down, we will accelerate," Musk noted. He expressed fear of a repeat of 2009 when General MotorsGM +2% and Chrysler went bankrupt and Tesla was “hanging on by a thread,” the Journal reported. Price Cuts Are Not Boosting Sales Price cuts aimed at boosting demand are not working as planned. In October 2022, Wall Street estimated such price cuts would result in about two million Tesla vehicle deliveries in 2023, Ryan Brinkman, an analyst at JPMorgan ChaseJPM -2%, told Bloomberg. The analyst expressed disappointment that price cuts did not have the desired effect. “Tesla has had to institute these price cuts only to sell fewer vehicles than analysts earlier expected. [Now Tesla’s] “valuation looks increasingly unsustainable,” Brinkman said. Hopes For A Surge In Self-Driving Cars May Have Been Too High While Musk is investing heavily in AI, investors are skeptical about whether a payoff — in the form of significant sales of self-driving software — is imminent. This week Musk waxed optimistic about AI. He said driverless cars and humanoid robots could make Tesla “the most valuable company in the world by far,” noted the Journal. With capital spending up 36% in the third quarter to $2.5 billion — which he attributed to “Cybertruck, AI and other R&D projects,” it is unclear whether a payoff is near, the Journal reported. Tesla stock has risen some 104% in 2023. Most of that strength came “as investors bet on artificial-intelligence plays, with some saying Tesla has the potential to become a leading AI company,” noted Bloomberg. Tesla’s potential may take decades to realize. As it could take that long for the company to “deploy its self-driving software,” according to Bloomberg. Another challenge for Tesla will be to maintain its EV industry lead as competition grows. One analyst said caution about Tesla is warranted. As Bloomberg reported, Adam Jonas of Morgan Stanley asked, “How much of the caution is related to slowing demand for its already ubiquitous product lineup and increased competition?” Where Tesla Stock Goes Next Tesla’s stock price target for the next 12 months is $266 per share, according to MarketWatch. With its shares down nearly 2% in early trading on October 20, the price target implies 23% upside. Yet analysts are skeptical. Here are some examples: Bank of America BAC -2.5%: neutral rating and reduced estimates. Analysts lowered future estimates due to Tesla’s “lower gross margin profile” and they expressed surprise Musk spent so much time talking about the global economy, according to a BofA Thursday note. Morgan Stanley: disappointed with Q3 results and cautious commentary. Its analysts wrote: “In our opinion, 3Q23 was one of the most cautious Tesla conference calls we’ve heard in years,” CNBC reported. Piper Sandler: lowered price target from $300 to $290 per share. Analyst Alexander Potter kept an overweight rating on the shares. “Cybertruck and other growth initiatives are on the horizon — but still, we wouldn't be surprised if TSLA trades sideways, at best, in the coming months,” IBD noted. With a mere 3% of its shares sold short, according to the Wall Street Journal, don’t expect short covering to protect investors should you choose to catch this falling knife.
Gun to head, TLSA at $212.75 is a long here. It is a boring stock because people don't really get shook out no matter how stupid the news is.
As a matter of fact Barrons has always been a Tesla hater. Let's break down their summary for proof: Tesla is in the process of retooling its factories to make the new models. Everyone was warned of the shutdowns. Analysts forecasts are their own. Barrons could just as well have belittled their incompetence. No need to repeat what I think about the Cybertruck and its extraordinary difficult manufacturing challenge. It's a ridiculous ego project of a child-man who wanted his tonka toy. Musk has repeatedly warned the world that prototyping is easy, volume production is hard and then decides to make a stainless steel electric truck... Ridiculous statement. You have to address your market. Europe could use a smaller urban EV at around $25k. They are more urbanized, commutes are shorter, town to town is shorter and people are used to travel by train/flights for 300+ miles, so a Tesla 2 would sell well there. But the US is different and Tesla's market is suburbia, individual homes with a charger and a sub 200 miles round trip commute. A Tesla 2 serves no market here, except for those who can't afford a 35k vehicle. Finally, you have China, but who'd be crazy enough to compete for the low price market in China? Stupid statement. Tesla is on its way to a 50% YoY sales growth. Wtf does that even mean? FSD is aspirational today. Musk has to sell it as the future of driving to justify its enormous development cost and at some point, when an agreement can be made with the government over user versus manufacturer responsibility in cases of accident, then we may see an FSD take up rate increase. In my opinion, there is a far greater likelihood that the FSD framework is first approved in Europe and the US will follow based on the EU model. Timeline is 5-10 years for approvals. Tech is only a couple of years away.
I'm like a hippo in a China shop and pay no attention to the subtleties beyond the dot and sometime the first number on the left of it, TSLA case in point. I'm confident of TSLA hitting 250+ before end of November, so 210, 211 or 212.. whatever. Hitting the low is exhilarating for a minute but meaningless in the making money scheme of things.
Yes your statement is, along with much of the rest of your post. Growth is not what informed investors want. They want stronger growth that what is projected, moving the goalposts forward. Hitting a target might be a reason to hold. But not a reason to buy or in your case buy more. Musk over-promises on eeeeeverything. He, and investors who eat it up, got rewarded ........ in the past. Now as the EV market matures a little, and they are not the only game in town - albeit the top dog - growth, massive growth (umm especially compared to starting at zero sales) will be harder to come by. Repeat massive growth, not above average growth. So above average growth gets priced at above average PE, PS, PR, PB whatever one's favorite metric. Reality.
What's wrong? A central thesis in growth stock investing is searching out FUTURE earnings. Current earnings have dropped. Future growth might come from CT, Semi, next model, energy, timing of which seems to keep getting delayed. Elon no longer in fighting mode, not backed in a corner. He is weak, whiny, not accepting responsibility. His time seems devoted to X. Not enough people quitting Tesla b/c of his A hole qualities. FSD. Elon has been lying. If next year or any of his other previous comments were true they would not be talking about training compute power doubling. His tease of current version (whatever number it is) being so much better has just repeatedly not been true, and can't be believed. He poorly censures himself, once commenting that the car thinks, but just a little. WTF? They have not solved for any observable problem for a long time. It attempts to drive around stopped school buses, drives fast enough to jump railroad tracks, and does poorly with speed control on new highways that are now several years old. I met a customer that was fine getting just NOA, not FSD. A real world user of FSD elected to go with a cheaper product as a better economic choice. When FSD 12 gets dropped to consumer, what real world problem will it solve? Someone was driving my car, backed into a mailbox and scraped it down the side of the car, trashed a mirror. How the heck does this happen with a car laden with safety features and FSD? The car lets you hit stuff and drag it 10 feet along the car? CT: Over promised, under delivered. 4680: All the questions and answers on this have been weak and lame. They claimed 40% reduction in waste. How are they years into this, building out factories, and having so much waste? Where the heck are the batteries going? https://insideevs.com/news/691019/tesla-produced-20millionth-4680-cell-texas/ There is really a lack of knowledge on 4680, present and future plans. Semi: Way too slow of a ramp. Why is energy storage growing? Perhaps because they can't sell cars and are shifting production.
Just a quick reminder below. An industry worthwhile being top of: The transition to electric vehicles is a global movement, and it's backed by automakers and governments alike. For instance, China has set a goal for new energy vehicles to make up around 40% of all car sales by 2030. The European Union has gone even further, declaring that all cars sold by 2035 should be GHG emissions-free. Meanwhile, countries like Britain, India, and Israel are on a mission to ban the sale of traditional gasoline and diesel cars by 2030. In the United States, the aim is for 50% of car sales to be GHG emissions-free by 2030.
$202.51 .......... Short term low likely soon. Maybe above was it. Even if it is doubt seriously LL's are done.