After Tesla’s underwhelming trading results announcement, Ismael Rashid, Equity Analyst at Charles Stanley has commented below;
Ismael Rashid, Equity Analyst at Charles Stanley: “The Magnificent 7 of 2023 may have already lost one of its members. Tesla’s fortunes seem to have reversed rather sharply following a slowdown in demand due to increased competition which the company have failed to offset with price cuts and thus face shrinking profit margins. This has led it to begin the year with its worst losing streak since 2016. Recent Q4 earnings, despite the robust gross margin print, underwhelmed for a second straight quarter, missing 3% on both revenue and EPS. The likely cause was the vague outlook for volume growth which was said to be ‘notably lower’ than in 2023. Moreover, as if the company didn’t have a lot to deal with, Tesla’s CEO Elon Musk is advocating for greater control of the company he founded. He believes the 13% he currently owns of Tesla doesn’t protect him from being voted out by an opposing shareholder group. His bargaining chip, being the promise to work on new AI and robotics, is noteworthy as it likely is a main cause of Tesla’s continued excessive premium valuation vs peers. This all makes for a much less magnificent and rather a more miserable 2024 for Tesla shareholders.”
