Tesla Stock Rallies Despite Earnings Miss
Tesla stock is moving higher despite coming up short of expectations for its fourth quarter. Here's what you need to know.
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Tesla (TSLA) stock is higher Thursday despite the electric vehicle maker coming up short of top- and bottom-line expectations for its fourth quarter.
Elon Musk continues to play a prominent role in the administration of President Donald Trump, whom the Tesla CEO ardently supported in the 2024 campaign for the White House.
Of greater significance for analysts when it comes to TSLA stock are progress on self-driving cars, more and cheaper EV models and valuation.
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In the three months ending December 31, Tesla's revenue increased 2.1% year over year to $25.7 billion, boosted by a 112.9% increase in its Energy Generation and Storage revenues to $3.1 billion. Earnings per share (EPS) rose 2.8% from the year-ago period to 73 cents.
"Q4 was a record quarter for both vehicle deliveries and energy storage deployments," Tesla said. "We expect Model Y to once again be the best-selling vehicle, of any kind, globally for the full year 2024, and we have made it even better, with the New Model Y now launched in all markets."
The results came up short of analysts' expectations. Wall Street was anticipating revenue of $27.3 billion and earnings of 76 cents per share, according to CNBC.
Tesla didn't provide any specific guidance for its fiscal 2025 first quarter or full year, but management did say it expects its vehicle business to "return to growth in 2025."
The EV maker said it remains on track to start producing lower-cost vehicles in the first half of 2025. And the Cybercab is scheduled for volume production beginning in 2026.
Is Tesla stock a buy, sell or hold?
TSLA stock is up 104% over the trailing 12 months, including a 180% rally off its 52-week low of $138.80 on April 22, 2024, and a 55% post-election bounce.
Given its recent surge, Wall Street is on the sidelines when it comes to the Magnificent 7 stock.
According to S&P Global Market Intelligence, the average analyst target price for TSLA stock is $324.10, which is a discount of about 20% to current levels. And the consensus recommendation is Hold.
Financial services firm Needham is one of those outfits with a Hold rating on TSLA stock.
"At a high level we see an auto original equipment manufacturers struggling to match supply and demand, with TSLA playing catch-up in autonomous driving until they can fully unlock their fleet of vehicles currently on the road, but now offering a modestly higher level of detail on TSLA Bot production cadence and total cost of goods sold to keep bulls fully engaged," writes Needham analyst Chris Pierce in a note assessing the company's results.
“We reiterate our Hold rating, viewing TSLA's call options on Full Self-Driving and Robotics as largely priced in at these levels."
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