The company has expressed a long-term goal of expanding vehicle production to 20 million by 2030. Fool.com contributor Parkev Tatevosian evaluates Tesla (TSLA -0.08%) stock according to estimates and assumptions from Wall Street analysts to create a prediction for the stock price in 2024. Profit more than tripled to $1.45 a share on an adjusted basis, beating the 97-cent average of analysts’ estimates and marking the eighth straight quarter of profit. Tesla shares rose as much as 2.6% before the start of regular trading Tuesday. The company has established itself as a disruptor, and it could continue living up to that image in the years to come. It’s worth noting that Tesla generated about $344 million in automotive regulatory credits revenue during the second quarter of 2022.
For the third quarter of 2023, the production and delivery numbers hit the wires and Tesla’s website on October 2. All in all, Bernstein analysts are skeptical about Tesla’s ability to sustain growth and meet expectations in the coming 2024 and consider a significant price decline a likely outcome. In a Nasdaq analysis of recommendations from 30 analysts, Tesla had a “buy” recommendation. Those analysts gave Tesla an average 12-month price target of $198.54, with a high target of $280 and a low target of just $85. Tesla did not pay out dividends in 2022, but that’s typical of a company focused on growth.
Although the company’s stock has significant potential, it also faces substantial challenges. Before investing your money in Tesla, here is what you should know about its past performance and future potential. Musk’s sometimes eccentric behavior and social media presence have affected public perception about the company, and supply chain disruptions and labor issues have also caused production delays. Finally, Tesla is focusing on auto insurance as a growth opportunity. Obviously, the company plans to do this differently than traditional insurance companies. Tesla plans to use its vast driver data for things such as braking, turning, unsafe following, forward collision warnings, and so on to predict the probability of a collision and offer custom premium rates based on that.
Tesla continues to serve its customers and non-Tesla users to speed up the transition to sustainable energy. Wall Street expectations for Tesla’s third quarter EPS range from $0.60 to $1.02. Ignite your portfolio—get the names of the top companies driving the AI revolution in this exclusive Forbes report, 12 Top AI Stocks to Buy Now.
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The main reason for the sale is to get the cash to pay the taxes Musk owes because he exercised stock option trades that were about to expire. Investors’ immediate response to Tesla earnings doesn’t always reflect what happens later, however. As an example, TSLA dipped to $153.75 after its first quarter, 2023 earnings release. But a month later, the stock found its stride and rose to $293.34 before dipping again after second-quarter earnings were announced. For the second quarter of 2023, Tesla reported record-high quarterly revenue but a disappointing operating margin of 9.6%. The company also spent $172 million more on research and development costs vs. the prior quarter.
Longer-term, the energy business, driverless taxis and a cloud computing service using Dojo could end up justifying Tesla’s high price tag today. Despite mounting downside risks facing Tesla’s near-term outlook, the company has had a reputation for its mixed bag of tools to salvage sentiment. As discussed in our previous coverage, Tesla’s initial delivery of the Semi trucks powered by the 4680 cells later this year suggests that a lower price mass market product might be on the way. Share Sale Pressure- There is also a growing risk of continued share sales in mass volumes by Musk to appease his rolling list of reasons, spanning the need for liquidity to settle his personal tax bills to funding his many ventures.
If Tesla’s volatility feels too risky for your investing style, see this Microsoft stock outlook. Analysts are largely bullish on Microsoft MSFT ahead of its earnings release on October 24. Tesla CEO Elon Musk had previously warned that production would alpari review dip in the quarter due to factory shutdowns for planned upgrades. Production totaled 430,488 units and deliveries were 435,059 units. The delivery total marks a 6.7% decline from the prior quarter, when the EV maker handed over 466,140 units.
Therefore, we should continue to see higher levels in Tesla’s stock price as the company advances. Tesla is expected to report a solid fourth quarter this year during its last earnings call for 2023. Based on 14 analysts on an LSEG poll, the Texas-based company is forecasted to report about 473,000 units delivered in the fourth quarter and a total of 1.82 million vehicle deliveries worldwide for the year. Interestingly, Tesla beat or met Wall Street’s updated EPS expectations in all four quarters.
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The company had previously predicted it would deliver 1.8 million units this year. Hitting that mark requires the hand-off of nearly 476,000 vehicles in the fourth quarter. That number is possible, but only if the Cybertruck launches successfully and spurs interest in other Tesla models. For context, deliveries in last year’s fourth quarter totaled 405,278.
While my revenue estimate is notably higher than the current $16.31 billion consensus number, my revenue figure is still lower than some higher-end calls that exceed $18.25 billion. If Tesla meets consensus figures, it will be a 52% YoY rise in revenues, and if the company meets my projections, we will see a 68% YoY surge in sales. Tesla will likely focus on ramping up Cybertruck production and the construction of Giga Mexico next year. The company will also be concentrating on the design of two next-generation vehicles. Elon Musk hinted that two next-generation cars were in the works earlier this year. Tesla is working on a whole new assembly line for its $25,000 vehicle, which is expected to be built in Mexico.
- The company will also be concentrating on the design of two next-generation vehicles.
- Analysts are largely bullish on Microsoft MSFT ahead of its earnings release on October 24.
- June of 2022 was the highest vehicle production month (estimated at 120,000 total) in the company’s history.
- However, we see Tesla performing and delivering better than expected.
While Tesla’s long-term prospects might entice investors to pay out for the stock, it might not be prudent for them to do so since any short-term underperformance by the business could lead to a massive contraction in its valuation. With so many uncertainties, such a scenario is not beyond the realm of possibility. The bullish camp predicts steep growth for TSLA, while Tesla bears believe the stock is only headed down. The average analyst rating for Tesla stock from 36 stock analysts is “Hold”.
Production And delivery
Several automakers and technology companies are working to make autonomous driving a reality, and most have the financial resources to achieve that objective. Tesla is also expanding its FSD beta testing to more drivers; that should help smooth the rollout of its FSD functionality. Electric vehicle (EV) maker Tesla (TSLA -0.08%) management made headlines (again!) last week after CEO Elon Musk conducted a poll about whether he should sell 10% of his Tesla stock.
Longer term, Tesla ideally wouldn’t be dependent on electric passenger car and truck sales for growth. The company’s fast-growing energy segment broker finexo should help in that regard. Launch of driverless taxis and a possible move into cloud computing with Dojo are also potential growth engines.
Zoom out further and we see that Tesla generated $1.46 billion from regulatory credits in 2021. Tesla then took profitability to the next level when it announced a $1.19 billion is ifc markets legit profit in the second quarter of 2021 (with $354 million coming from credit sales). Tesla ended 2021 with a net income of $5.51 billion (a 665% increase from 2020).
Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. In August, the stock dipped on news that Tesla had cut prices in China to defend its market share. The stock rose again when the China Passenger Car Association reported year-over-year and month-over-month sales growth on Tesla EVs made in China.
Provided that the stock market continues to stabilize here, I expect Tesla’s shares to break out to new ATHs following the upcoming earnings announcement. In January 2023, via the fourth quarter Tesla stock earnings release, Musk noted that the company’s average selling prices had been declining for years. Despite that trend, Tesla had substantially improved its operating margin through cost control efforts.
Considering Tesla’s current valuation, it’s clear most investors don’t view Tesla as a carmaker. Investors are paying a steep premium because they believe in Tesla’s ability to innovate, open new markets, diversify its business model and create massive shareholder value. Management Uncertainties- There is also rising discontent among Tesla investors over the dilution of Musk’s attention across his many ventures – the most recent being the high-profile, dramatic acquisition of Twitter. Musk has long been a centrepiece to Tesla’s rise to the top among retail investors. What really kept Tesla afloat were emissions credits, namely the sale of these credits. Since Tesla manufacturers electric vehicles, it receives carbon credits from various clean energy government incentives.