After the financial report was released, Tesla's stock price plummeted and several institutions lowered their target prices.
On January 25th local time, the US stock market closed, with Tesla's stock price plummeting by 12.13% to close at $182.63 per share. The total market value evaporated overnight by $80.111 billion (approximately RMB 570 billion). Within this month, Tesla's market value has fallen by approximately $210 billion.
Since entering 2024, Tesla's stock price has been continuously declining. The poor performance in 2023 was the direct reason for the sharp drop in stock prices, but at the same time, Tesla's new car launch speed was slower than expected, CEO Elon Musk was "threatening" the board of directors to increase equity, and key information was "playing Tai Chi" during the financial report conference, all of which cast a shadow over Tesla's growth.
Both the 2023 performance and 2024 outlook fell short of expectations
Tesla's fourth quarter financial report shows that in the fourth quarter of 2023, the company's total revenue was $25.167 billion, a year-on-year increase of 3%, lower than analysts' expectations of $25.87 billion; The gross profit margin in the fourth quarter was 17.6%, lower than analyst expectations of 18.1% and the lowest level since 2019.
Looking at the entire year, Tesla's total revenue reached $96.773 billion, a year-on-year increase of 19%, reaching a historic high. However, compared to the growth rate of over 50% in the previous two years, the revenue growth in 2023 has significantly slowed down.
The outlook for 2024 also did not bring confidence to investors.
Tesla stated in its financial report that the sales growth rate in 2024 may be significantly lower than the growth rate in 2023, as our team is committed to launching the next generation of cars at a super factory in Texas.
Meanwhile, Tesla did not provide a specific delivery volume outlook for 2024, as the company had previously set an average annual delivery growth rate of 50%. During the earnings conference call, Tesla's CFO only responded that Tesla will not grow at the same rate during certain periods.
For the new low-priced models, Musk stated that the next generation of cars is expected to be put into production in the second half of 2025. He emphasized that the production of new car models will be a challenging project, but once optimized, it may change the game rules of large-scale automobile production. However, analysts had been expecting the next generation of new cars to be put into production in 2024.
In addition, Musk reiterated his demand for more control over Tesla during the earnings conference call, which also brought some uncertainty to Tesla.
On January 16th, Musk posted on X stating that he would rather build products outside of Tesla without 25% of the voting rights.
During the earnings call, Musk responded again, "I see a path to creating truly powerful artificial intelligence and robotics giants, and I hope to have enough influence. If we could issue dual equity stocks, that would be ideal. I'm not looking for additional economic benefits, I just want to become an effective butler."
Multiple bearish factors are sandwiched, and Tesla has been hit by multiple institutions lowering its target price
After the release of financial reports, investment banks such as Goldman Sachs, Wade Bush, and HSBC have all lowered Tesla's target prices.
Specifically, Goldman Sachs has lowered Tesla's target price from $255 to $220; UBS has lowered Tesla's target price from $229 to $225; Wells Fargo Bank has lowered Tesla's target price from $223 to $220; HSBC has lowered its target price from $146 to $143; Wade Bush lowered his target price from $350 to $315.
Among them, Wade Bush analyst Dan Aives is a well-known Tesla bull who stated in a report on Thursday that the company's earnings conference call brought "very few answers, as well as a lot of questions and frustration" to Wall Street.
Aives said that investors are trying to find specific details about Tesla's declining profit margins and car price cuts, but what they get is a "more cautious" Musk.
Aives wrote, "We expect Musk and the team to come forward on a conference call like adults, providing corresponding strategies and financial overviews on ongoing price reductions, profit structures, and fluctuating demands."
However, Morgan Stanley maintains Tesla's stock rating as "overweight" and offers a target price of $345.
Adam Jonas, an analyst at Daimler, stated in a report that Tesla has the potential to break through in artificial intelligence this year, and the company's capital expenditure for the 2024 fiscal year is expected to be at least $10 billion, higher than Daimler's expectation of $8.5 billion.
Wall Street is generally not optimistic about the electric vehicle market in 2024. Due to the slowdown in market demand and intensified competition, Tesla's American counterparts such as Rivian, Lucid, and Fisker are all experiencing a decline in stock prices.
In fact, since entering 2024, Tesla's stock price has been performing poorly, with a cumulative decline of over 25% this year. However, in 2023, Tesla's stock price has doubled. Among the seven major technology giants in the US stock market, Tesla is the worst performing stock, while Apple, Microsoft, Alphabet, Amazon, Nvidia, and Meta, six technology companies, have seen their stock prices soar and even repeatedly reach historic highs.
Michael Hewson, chief market analyst of CMC Markets, a securities broker, said, "The problem faced by Tesla is that any major measure aimed at improving sales may need to sacrifice operating profit margin, because Tesla must compete with BYD in China, and competition in other regions will also intensify."