Tesla, the leader of the electric vehicle industry, will release its fourth quarter financial report after the US stock market closes on Wednesday, and the market is holding its breath. Currently, analysts generally predict that the company's Q4 revenue will reach $25.87 billion, with an estimated earnings per share of $0.78.
After experiencing a shocking surge in 2023, investors are considering Tesla's future development trajectory, so this financial report is also highly anticipated.
Tesla's stock price more than doubled last year, as the price cuts of some of its models boosted sales, while Wall Street investors flocked to stocks related to artificial intelligence.
In addition, Tesla's delivery and production have exceeded expectations. The company produced 430488 vehicles last quarter and delivered a record breaking 435059 vehicles. Investors will look for signs that Tesla can maintain this momentum in the coming year.
On the other hand, it is precisely because of Tesla's "price reduction strategy" adopted last year that the market has paid close attention to the trend of its gross profit margin. Currently, the market generally expects the company's Q4 gross profit margin to climb to 18.05%, an increase from 17.9% in the third quarter and 16.0% in the same period last year.
Finally, investors will also pay attention to Tesla's progress in "future technologies" such as artificial intelligence, autonomous driving, and robotics. It should be noted that Tesla's stock price has fallen by 9% since the release of its previous financial report, which has made investors more nervous about the current financial report.
Here is the opinion of Wall Street analysts on Tesla's Q4 financial report:
Morgan Stanley
Da Mo warns that the imbalance between supply and demand of electric vehicles may put pressure on Tesla this year. Analysts warn that although the global supply of electric vehicles is increasing, demand seems to be weakening.
The bank stated in a report. "Looking ahead, are we approaching the market's biggest negative sentiment towards electric vehicles? We believe that the trough may occur in the second half of 2024."
In addition, Da Mo analysts are optimistic about Tesla's artificial intelligence and robotics projects, but they point out that Musk's recent threat to remove the AI project from the company may shake their views.
"Electric vehicles face difficult challenges, but we still have a positive outlook on artificial intelligence and robots," the bank added.
Morgan Stanley reiterated its "overweight" rating, but lowered its target price from $380 per share to $345, indicating a potential upward potential of 65%.
Goldman Sachs
Goldman Sachs stated that Tesla's long-term growth potential is promising, but the company faces significant risks in the short term.
The strategists at the bank said, "We believe that the main unfavorable factors include a larger than expected decrease in car prices, intensified competition for electric vehicles, and delays in products/features such as FSD/third-generation platforms."
The bank also identified Tesla's "internal control environment", profit margin, and "high vertical integration" as the main risks.
Goldman Sachs reiterated its "neutral" rating and a target price of $235, which means the company's stock price has a 13% upward potential.
Investment bank Wedbush
In the coming year, the demand for electric vehicles is bound to slow down. According to Wedbush analysts, Tesla will have to choose whether to continue cutting car prices to maintain competitiveness or to maintain price stability in 2024.
"We believe that Tesla's pricing path will be the fundamental measure for Tesla in the coming years. This will be the focus of Wall Street's attention tomorrow to measure Tesla's expectations for global consumer demand in 2024," the bank said in a report.
Wedbush maintains its "stronger than the market" rating and a target price of $350, indicating a 68% upward potential for the stock.
Market research company CFRA Research
Garrett Nelson, Senior Equity Analyst at CFRA, stated that Tesla still has long-term growth potential as the company's production and delivery speeds are accelerating. Last year, delivery volume surged by 38%, production increased by 35%, reaching 1.8 million vehicles.
The weakening of the electric vehicle market this year means that Tesla may see some smaller competitors suffer. Traditional automobile manufacturers will also reduce their growth plans in the field of electric vehicles, which may reduce the competition faced by Tesla.
The company stated, "We believe the upcoming product releases are positive, even after Tesla's stock performed well in 2023. We are still optimistic about Tesla and expect the company to benefit from a decrease in unit costs (especially battery costs) and launch its long-term commitment to mass market electric vehicle models later this year."
The CFRA has reiterated its "buy" rating and a target stock price of $300, which means the company's stock price has a potential increase of 44%.
Deepwater Asset Management
The company stated that everyone will pay attention to Tesla's profit margin in the new year.
"For Tesla's profitability, the most important thing is profit margin. Although I expect a slight improvement this quarter, I believe that the profit margin outlook for 2024 will tend to stabilize rather than expand."
But the company believes that Tesla should maintain its share in the electric vehicle market this year, and its growth in the coming years is bound to expand.
By 2025, Tesla's profit margin may rebound to over 20%. At the same time, the company's strategists estimate that delivery volume may soar from the expected 17% increase in this quarter to 24% during this period.