Earnings Report Preview | Tesla's Profit Margin, Analyst Views, Cybertruck Still in Focus

Source: US Stock Research Society, Author | Chris Katje, Translation | Wall Street Big Events

Tesla will announce its fourth-quarter financial results after the market closes on Wednesday, January 24th. Prior to the release of this report, the company's performance in the third quarter fell short of expectations, while the fourth-quarter deliveries exceeded analysts' expectations.

Here are the profit forecasts, analyst comments, and key items of interest for investors in the fourth quarter.

Profit forecasts: According to predictions, analysts expect Tesla's fourth-quarter revenue to be $25.547 billion. The company's fourth-quarter earnings per share are projected to be $0.74.

Tesla reported earnings per share of $1.19 and revenue of $24.318 billion for the fourth quarter.

In the recently reported third quarter, Tesla's revenue and earnings per share both fell short of analysts' expectations, at $23.35 billion and $0.66, respectively.

Tesla has exceeded or met analysts' expectations for earnings per share in 9 out of the past 10 quarters, and exceeded analysts' expectations for revenue in 7 out of the past 10 quarters. The production and delivery data for the fourth quarter has been previously announced. Tesla reported deliveries of 484,507 vehicles and production of 494,989 vehicles, representing a year-on-year increase of 19.55% and 12.57%, respectively.

Analyst opinions: Gene Munster, co-founder of Loup Ventures and Tesla investor, is focusing on four key items for Tesla's fourth-quarter earnings, namely profit margin, Cybertruck, FSD and other updates, and the market share of electric vehicles in the United States.

"For Tesla's profitability, everything is about profit margin. While I expect a slight improvement in the quarter-on-quarter comparison, I believe the profit margin outlook for 2024 will be stable rather than expanding," said Munster.

Munster predicts that Cybertruck deliveries will reach 35,000 vehicles in 2024 and suggests that the actual number of people on the Cybertruck waiting list, which currently stands at 2 million, may be lower than 500,000 in the next 6 months due to pricing reasons.

Morgan Stanley analyst Adam Jonas lowered his target price for Tesla stock from $380 to $345 ahead of the fourth-quarter earnings release, citing evidence that the global electric vehicle market is facing headwinds due to supply growth and slowing demand.

Jonas' Tesla component price target sum includes the valuation of the company's automotive business, mobility services, batteries, insurance, and Tesla Energy. The target price does not include the valuation of Optimus Bot.

Wedbush analyst Daniel Ives praised Tesla's fourth-quarter deliveries as a "significant achievement." This analyst, who has given Tesla an outperform rating and a target price of $350, also stated that the Chinese market is a "clearly successful area" for Tesla.Ives said, "This is an important quarter for Tesla, with strong deliveries and momentum leading up to 2024, as demand has increased since the third quarter according to all our global surveys."

One of Ives' predictions for 2024 is that Tesla will launch a car priced below $30,000 by the end of 2024, which he says "could completely change the sales game for the company."

Key issues to watch for in Tesla's fourth-quarter earnings report include the timing of the next generation of vehicles, the number of Cybertruck orders, the release schedule for FSD version 12, and when Tesla Semi will achieve mass production.

Cybertruck is a key topic from the third-quarter performance, and the release date has been officially announced. While Tesla is unlikely to disclose the number of Cybertruck deliveries in the fourth quarter, investors are eager to learn more about delivery estimates for 2024 and how many people remain on the reservation list after official pricing is announced.

Tesla exceeded expectations for deliveries of 1.8 million vehicles in 2023. Investors will anxiously await the company's expectations for 2024 and whether Tesla anticipates double-digit year-on-year growth.

Another item of interest may be Musk's comments about wanting to own more Tesla stock to increase his involvement in the company's artificial intelligence plans.

"Tesla has grown to become a leader in the field of artificial intelligence and robotics without about 25% of voting control, and that worries me. I have enough influence, but not enough to prevent myself from being overthrown," Musk recently stated.

Ives said that if Musk were to create more next-generation AI projects outside of Tesla, "it would obviously have a significant negative impact on Tesla."