Tesla's shrinking margins are 'keeping investors up at night'
Here what some analysts are saying about Tesla's stock and its earnings report: "The near-term margin pain for long-term demand/volume gain is a strategy the Street is mostly on board with, however dipping below the magical 20% threshold is a concern," said Ives.
The company"walks a tight rope" between margin pressure versus driving stronger global demand for its Model Y and"In a nutshell, we remain very bullish on the Tesla story, HOWEVER this margin compression and price cut narrative must be carefully managed over the coming quarters as it now emerges as a clear overhang on the stock.
"But with Austin and Berlin [factories] continuing to ramp, first deliveries of the Cybertruck, groundbreaking of the Mexico plant expected in the coming months, and a low-priced coupe that we believe will be introduced in '24, we remain at a Strong Buy.""Tesla has grown deliveries at less than the 50% year-over-year 'goal' in four straight quarters as well as for the full year 2022.
"TSLA Has 85%+ Downside Even If Units Sold Grows 3.5x," he said."If we estimate more reasonable margins and market share achievements for Tesla, the stock is worth just $28/share. Here's the math, assuming Tesla's: Net Operating Profit After Tax margin is 13% in 2023 and falls to 7% in 2023–2031, • revenue grows at consensus rates in 2023 , 2024 , and 2025 , invested capital grows at a 6% CAGR from 2023-2031, then the stock would be worth just $28/share today – an 85% downside to the current price.""Guidance of 1.
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