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Tesla ((TSLA - Free Report) ) became a Zacks #5 Rank again on April 12 when shares were still trading above $170 and estimates were still dropping ahead of the EV maker's Q1 report on Tuesday 4/23.
My colleague Shaun Pruitt described the situation in his April 15 article...
In the two months prior, the Zacks EPS Consensus fell over 20% from $3.44 to $2.73.
And next year plunged nearly 24% from $4.61 to $3.52.
These downward analyst revisions ahead of the company report cause TSLA shares to drop under $140 on Monday 4/22, the eve of judgment day.
But with the news on 4/23 the market seemed to breathe a collective sigh of relief that things were not worse than delivered.
While investors have been debating the company numbers, statements, and plans, here we'll just focus on why TSLA shares will remain in the cellar of the Zacks Rank.
Since the report, this year's EPS projection has fallen to $2.48, representing a 20% annual drop in profits.
Investors knew that Tesla was aggressively cutting the prices of its cars to gain dominant position in the EV market.
What they might not have counted on was how hard it would be for the top maker to also cut costs.
What's Ahead
The faithful got a welcome surprise this past Monday when it was announced that China was ready to partner with Full-Self Driving (FSD) initiatives.
This shot TSLA shares back above $190. But it remains to be seen if this is a near-term driver in 2024 of sales and profits.
As many debates rage about the best strategic moves for Tesla going forward -- FSD, the charging network, China imperatives -- the stock will likely remain hostage to the sales growth outlook tempered strongly by the profit metrics.
Since the profit peak in 2022, every quarter that goes by without a stabilization of net income gives investors reason to believe that the EV revolution of mass adoption may be farther away than they once believed.
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Bear of the Day: Tesla (TSLA)
Tesla ((TSLA - Free Report) ) became a Zacks #5 Rank again on April 12 when shares were still trading above $170 and estimates were still dropping ahead of the EV maker's Q1 report on Tuesday 4/23.
My colleague Shaun Pruitt described the situation in his April 15 article...
In the two months prior, the Zacks EPS Consensus fell over 20% from $3.44 to $2.73.
And next year plunged nearly 24% from $4.61 to $3.52.
These downward analyst revisions ahead of the company report cause TSLA shares to drop under $140 on Monday 4/22, the eve of judgment day.
But with the news on 4/23 the market seemed to breathe a collective sigh of relief that things were not worse than delivered.
While investors have been debating the company numbers, statements, and plans, here we'll just focus on why TSLA shares will remain in the cellar of the Zacks Rank.
Since the report, this year's EPS projection has fallen to $2.48, representing a 20% annual drop in profits.
Investors knew that Tesla was aggressively cutting the prices of its cars to gain dominant position in the EV market.
What they might not have counted on was how hard it would be for the top maker to also cut costs.
What's Ahead
The faithful got a welcome surprise this past Monday when it was announced that China was ready to partner with Full-Self Driving (FSD) initiatives.
This shot TSLA shares back above $190. But it remains to be seen if this is a near-term driver in 2024 of sales and profits.
As many debates rage about the best strategic moves for Tesla going forward -- FSD, the charging network, China imperatives -- the stock will likely remain hostage to the sales growth outlook tempered strongly by the profit metrics.
Since the profit peak in 2022, every quarter that goes by without a stabilization of net income gives investors reason to believe that the EV revolution of mass adoption may be farther away than they once believed.