Charged up
Tesla (TSLA) is set to announce its Q4 earnings after the market closes, with a conference call at 5:30 p.m. ET. The earnings report will be published around 4:05 p.m. on Tesla's Investor Relations website, followed by a press release.
FactSet's consensus estimates for EPS and revenue are $0.73 and $25.6 billion, respectively.
TSLA faces challenges with declining margins, influenced by price cuts to sustain demand in a high interest rate environment. In Q3, gross margin fell to 17.9%, and operational costs increased due to investments in AI and autonomous driving technology, as well as the upcoming Cybertruck launch.
The upcoming earnings report will focus on gross margin and automotive gross margin, with improved factory utilization and supply chain costs in Q4. However, price reductions and the Cybertruck launch may offset these gains. Labor costs are also a concern, especially after recent strikes in Sweden and Denmark.
TSLA reported strong Q4 deliveries of 484,000 vehicles, a 20% increase, which may have been boosted by the impending loss of the $7,500 federal tax credit. TSLA likely failed to meet criteria for EV tax credit qualification.
Elon Musk has shown caution regarding TSLA's future production growth, stating that maintaining a 50% compound growth rate indefinitely is improbable. He is enthusiastic about AI and Dojo, TSLA's supercomputer, which he believes will significantly impact the company's financial metrics.
The December 1 Cybertruck launch was less successful than anticipated, with the most affordable model not available until 2025 and priced higher than expected. Details on Cybertruck orders and production targets will be important, with an annual production goal of 250,000 units.
TECHS:
Lastly, the stock has been stuck in reverse so far in 2024, falling by about 18% year-to-date, reflecting muted expectations and potentially setting the stock up for a post report setup.
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