Why is Tesla Inc (TSLA) Stock down?
Shares of Tesla (TSLA) dropped by 5.46% from $222.11 to $209.98 in the trading on Thursday, Novemeber 9, 2023. The reasons why TSLA down include:
- Bearish Sentiment: Tesla, along with other electric vehicle (EV) stocks like Rivian Automotive (RIVN) and Lucid Motors (LCID), faced a bearish market sentiment.
- Tepid Earnings: Analysts and investors were disappointed with the earnings results of EV companies, leading to concerns about their future growth.
- Higher Interest Rates: Rising interest rates negatively impacted EV stocks, affecting their valuations and consumer affordability.
- Valuation Worries: Tesla, in particular, has an exceptionally high valuation compared to traditional auto companies. HSBC analyst Michael Tyndall initiated coverage on Tesla with a reduce rating and a $146 price target, significantly lower than its market price at the time. Tyndall's criticism focused on Tesla's valuation, especially its reliance on innovations in autonomy and robotics, which might not yield significant revenue and profits until the end of the decade. He emphasized that assigning a value to these areas is challenging due to regulatory, technological, and competition risks.
- Brand Risk: Tesla's CEO, Elon Musk's controversial comments and ventures outside of Tesla added to the company's brand risk.
Shares of Tesla (TSLA) dropped by 4.79% from $207.30 to $197.36 in the trading on Monday, October 30, 2023. The reason why TSLA stock down is due to concerns regarding electric vehicle (EV) demand:
- EV Demand Uncertainty: Despite Tesla's historic high market capitalization valuation, there were worries about sustained EV demand, as it is crucial for the company's growth.
- Panasonic's Battery Production Cut: Panasonic, a significant Tesla supplier, reduced its automotive battery production due to a global slowdown in EV demand, leading to a 15% decrease in annual profit guidance.
- Tax Credits and Interest Rates Impact: Exclusion of high-end EVs from tax credits and concerns about the affordability of EVs due to higher interest rates added to the uncertainty. These concerns, along with a cautious outlook from other automakers on EV sales, contributed to Tesla's stock decline of approximately 25% over the past three months. Some investors saw this as an opportunity to potentially invest in Tesla at a lower price point, considering its long-term potential.
Shares of Tesla, Inc. (TSLA) dropped by 9.30% from $242.68 to $220.11 in the trading on Thursday, October 19, 2023. The reasons why TSLA stock down include its disappointing Q3 earnings and disastrous Elon Musk's conference call:
- While Tesla's Q3 financial results initially missed expectations, the stock remained relatively stable following the release, likely due to anticipation surrounding the Cybertruck delivery event.
- However, the situation took a turn for the worse during the subsequent conference call with Tesla's management. Several pieces of information from the call likely contributed to the stock's sharp decline. Elon Musk's remarks about "tempering expectations" regarding the Cybertruck and Tesla's decision to slow down on Gigafactory Mexico projects were among the key factors. Additionally, the overall tone and mood of the conference call may have played a significant role in the current sell-off, as investor sentiment can be greatly influenced by the communication and outlook provided by company leadership during such events.
Shares of Tesla, Inc. (TSLA) dropped by 4.78% from $254.85 to $242.68 in the trading on Wednesday, October 18, 2023. The reason why TSLA stock down is due to its disappointing Q3 earnings
- Earnings Miss: Tesla reported quarterly earnings of $0.66 per share, falling short of the Zacks Consensus Estimate of $0.72 per share. This marked a decrease from earnings of $1.05 per share in the same period the previous year. The earnings miss could have negatively impacted investor sentiment.
- Revenue Miss: Tesla's Q3 revenues came in at $23.35 billion, missing the Zacks Consensus Estimate by 4.23%. While this figure was higher than the previous year's revenue of $21.45 billion, the revenue miss may have disappointed investors.
- Consistent Misses: Over the last four quarters, Tesla has missed consensus EPS estimates three times, potentially eroding investor confidence in the company's ability to meet expectations.
Shares of Tesla, Inc (TSLA) dropped by 1.57% from $262.99 to $258.87 in the trading on Thursday, October 12, 2023. The reason why TSLA stock down include:
- Higher-than-expected CPI: On October 12, a report revealed that September's Consumer Price Index (CPI) inflation came in at 3.7%, surpassing expectations of 3.6%. Core CPI inflation stood at 4.1%, in line with expectations. This higher inflation raised concerns among investors about a potential interest rate hike by the Federal Reserve, leading to a broader decline in the stock market, including TSLA stock.
- Middle East war: The conflict between Israel and the Palestinian militant group Hamas in the Middle East contributed to an increase in oil prices. Rising oil prices can negatively impact electric vehicle (EV) stocks like TSLA, as they may face higher production and operating costs, which can weigh on their profitability and stock prices.
Tesla shares were down 9.74% after its Q2 earnings call disappointed investors. Tesla's revenue per vehicle (excluding credits) has fallen by 20.4% to $45,626 in the past year, while the margin per vehicle has dropped by 44.3%. Price cuts aimed at stimulating demand may pose challenges for other manufacturers.
Shares of Tesla (TSLA) fell on Monday, declining 6.06% today as traders appeared to rotate out of large-cap tech stock that has already gained an impressive amount this year. On Sunday, a Goldman Sachs analyst released a not to his client downgrading his rating on Tesla from buy to neutral. Tesla remains a highly volatile and contenious stock, prone to big jumps higher and creashes lower.