We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
I. Tesla’s Share Price Fade? It Boils Down to Earnings Fundamentals.
Want to know one very good global factor behind Tesla’s (TSLA - Free Report) notable late 2023 and early 2024 earnings and share price slide?
First, to get up to speed, consult the following Zacks chart and table.
Zacks Tesla Price, Consensus, and EPS Surprise Chart
Image Source: Zacks Investment Research
Then, consider news I found in electric transport blog Electrek on March 11th, 2024—
BYD is leading an offensive against internal combustion engine (ICE) vehicles.
A new report claims BYD’s new EV platform will slash costs even further as the automaker kicks off a “liberation battle” against gas-powered cars.
Best known for its low-cost EVs, such as the Dolphin, Atto 3, and sleek Seal sedan, BYD is taking its game up a notch in 2024.
After surpassing Tesla to become the largest EV maker globally in the last three months of 2023, BYD says Tesla is not the competition. It’s gas-powered cars.
BYD launched a price war on ICE vehicles last month with the new Qin Plus EV and PHEV models. Starting at $15,200 (109,800 yuan), the new EV officially opened a “new era of electricity is cheaper than oil.”
The DM-i (PHEV) version is even cheaper, starting at around $11,000 (79,800 yuan). It includes up to 74 mi (120 km) NEDC all-electric range.
The all-electric Qin Plus is offered with 48 kWh or 57.6 kWh battery packs for up to 261 mi (420 km) or 316 mi (510 km) CLTC range, respectively.
II. The Zacks April 2024 Sector/Industry/Company Telescope
The Mar. 29th, 2024 Zacks Industry Ranks show only two Very Attractive sectors: Info Tech and Financials. Industrials fell to Attractive this month.
We had many upgraded sectors: Health Care rose to Attractive, with the Medical Care industry upgrade. Materials rose to Attractive, with a Building Products/Construction Materials upgrade. Finally, Upgraded to Attractive was Utilities. Water Supply is a leader.
At Market Weight was an upgraded Energy sector. Alternates led the way up.
Consumer sectors were at the back of the ratings line. That looks ominous. But it could be just some mean-reversion in earnings estimate revisions. Consumer Discretionary and Communications fell to Unattractive ratings.
Consumer Staples stayed at Very Unattractive, suffering from high food costs.
(1) Info Tech stayed Very Attractive. Semis & Computer Software Services led again.
Image: Bigstock
Tesla's Share Price Fade: Zacks APRIL Market Strategy
The following is an excerpt from Zacks Chief Strategist John Blank’s full Apr Market Strategy report To access the full PDF, click here.
I. Tesla’s Share Price Fade? It Boils Down to Earnings Fundamentals.
Want to know one very good global factor behind Tesla’s (TSLA - Free Report) notable late 2023 and early 2024 earnings and share price slide?
First, to get up to speed, consult the following Zacks chart and table.
Zacks Tesla Price, Consensus, and EPS Surprise Chart
Image Source: Zacks Investment Research
Then, consider news I found in electric transport blog Electrek on March 11th, 2024—
II. The Zacks April 2024 Sector/Industry/Company Telescope
The Mar. 29th, 2024 Zacks Industry Ranks show only two Very Attractive sectors: Info Tech and Financials. Industrials fell to Attractive this month.
We had many upgraded sectors: Health Care rose to Attractive, with the Medical Care industry upgrade. Materials rose to Attractive, with a Building Products/Construction Materials upgrade. Finally, Upgraded to Attractive was Utilities. Water Supply is a leader.
At Market Weight was an upgraded Energy sector. Alternates led the way up.
Consumer sectors were at the back of the ratings line. That looks ominous. But it could be just some mean-reversion in earnings estimate revisions. Consumer Discretionary and Communications fell to Unattractive ratings.
Consumer Staples stayed at Very Unattractive, suffering from high food costs.
(1) Info Tech stayed Very Attractive. Semis & Computer Software Services led again.
Zacks #1 Rank (STRONG BUY): Nvidia (NVDA - Free Report)
(2) Financials stayed Very Attractive. Insurance stayed tops. Investment Banking & Brokering and Finance are also quite strong.
Zacks #1 Rank (STRONG BUY): The Progressive (PGR - Free Report)
(3) Industrials fell to Attractive from Very Attractive. Metal Fabricating, Pollution Control, and Business Products looked strong.
Zacks #1 Rank (STRONG BUY): Advanced Drainage Systems (WMS - Free Report)
(4) Health Care rose to Attractive from Market Weight, with Medical Care upgraded.
(5) Materials rose to Attractive from Market Weight. Building Products/Construction Materials was notably strong here.
(6) Utilities rose to Attractive from Unattractive. Utilities - Water Supply a leader.
(7) Energy rose to Market Weight from Very Unattractive. Energy-Alternates were the strongest niche.
(8) Consumer Discretionary fell to Unattractive from Very Attractive. Non-food Retail stayed strong. Home Furnishing-Appliances was second here.
(9) Communications Services moved to Unattractive from Attractive. Telco Equipment is now at market weight.
(10) Consumer Staples stayed at Very Unattractive. Soap & Cosmetics and Food/Drug Retail are best, but only rate a Market Weight rating.
III. Conclusion
This recent Telsa share price and earnings fade can be best understood within the context of the “Magnificent Seven” stocks.
Zacks Revenue TTM is shown as the blue line in the chart below.
The green lines in the chart below represent Earnings Before Interest and Taxes (EBIT), in a Trailing Twelve months (TTM) context.
Image Source: Zacks Investment Research
You can easily see in the lower left hand side chart: A serial Tesla earnings pullback in 2023 and YTD 2024 screams back at you.
In part --and no small part: this shows intense price competition — ramping up in the global Electric Vehicle (EV) markets.
Enjoy the rest of my Zacks APRIL 2024 market strategy report.
Warm Regards,
John Blank, PhD.
Zacks Chief Equity Strategist and Economist