As Tesla Inc. cuts prices and scales back its delivery goals, even one prominent bull is feeling spooked about the electric-vehicle company’s lack of clarity on the road ahead.
Wedbush’s Daniel Ives, often effusively enthusiastic about the stock, didn’t mince words when summarizing Tesla’s
Wednesday afternoon earnings call, which he dubbed a “track wreck.”
“We were dead wrong expecting Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand … instead we got a high level Tesla long-term view,” Ives wrote.
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Management talked about topics like the timelines for next-generation vehicles and the status of Full Self Driving investments, Ives said, whereas investors seemed to want “concrete guidance” given Tesla’s disclosure that unit growth this year would be lower than it was last year. He also wanted to see commentary on margins and expense structure.
Ives added that his “near-term confidence in the story is shaken,” though he still likes Tesla as a long-term play. He cut his price target to $315 from $350 while keeping an outperform rating on the stock.
Shares of Tesla were off 9% in Thursday’s premarket trading.
Baird’s Ben Kallo, meanwhile, acknowledged that Tesla’s outlook was “vague” but also saw a silver lining in that it “gives TSLA room to meet expectations for the year.” He kept an outperform rating and $300 price target on the stock.
Pressure seen on growth and margins
Bearish analyst Toni Sacconaghi was far more cautious in a note to clients titled: “Where is the hope?”
“While 2024 will be a challenging year, it is becoming increasingly apparent that 2025 will likely not be better, with continued pressure on growth and margins,” he wrote.
Sacconaghi pinpointed commentary around the company’s next-generation model, which management expects will start production in the second half of 2025. “Tesla has historically been optimistic on estimated timeframes,” he noted, meaning “high-volume availability of Model 2 may only begin well into 2026, assuming the ramp is not as challenging as Tesla has experienced with its other new models (Cybertruck, Model 3) — which is not assured.”
He has an underperform rating and $150 target price on the shares.
Michael Kramer, founder of Mott Capital, took a victory lap of sorts as he highlighted Tesla’s move to yank recurring language in its shareholder letter that previously discussed the company’s target for 50% compound annual growth in volume.
“I think that is a really big deal, and I know that when I owned the stock, what got me to sell it was that I realized at some point that language needed to come out, and I wanted to be nowhere near this when it did,” he wrote in a blog post.
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