Tesla's stock price has plummeted, and its market value has evaporated by 82 billion! Analysts accuse management of failing to perform their duties
Tesla's stock price took a heavy hit in the latest trading session, falling more than 12%. The plunge was due to Tesla's fourth-quarter revenue and profit falling short of analysts' expectations, and predicting a significant decline in electric vehicle sales this year. The day's plunge caused Tesla's market value to wipe off a staggering $82 billion, its worst one-day performance since the stock price fell 21% in September 2020. Wall Street analysts have been harshly critical of Tesla's management.
Among them, Dan Ives, a Tesla analyst who has attracted much attention, said in the latest report that Tesla answered too few questions from Wall Street on the earnings call, which was very disappointing. Investors have been looking forward to the specifics of Tesla's electric vehicles that are cutting costs and keeping cutting prices, but Musk is only focusing on the production of next-generation electric vehicles and investments in fully autonomous driving and artificial intelligence.
Ives further noted that they expect Musk and his team to respond more clearly to the current ongoing price cuts, yield structure, and demand volatility on the call, as well as provide a strategic and financial overview. However, contrary to their expectations, Tesla has gone far short in this regard, which has made them doubt Tesla's long-term development prospects.
While Ives still maintains Tesla's stock rating at an "outperform" level, he lowered his 12-month price target to $315 from $350. He believes that the possibility of further price cuts for Tesla, as well as the lack of clear profitability and sales forecasts, pose a "four-degree storm" for Tesla.
However, Ives generally believes that Tesla's long-term growth capacity remains strong, and the market's acceptance of fully self-driving technology and electric vehicles will ultimately improve Tesla's profitability. On the other hand, CFRA Research analyst Garrett Nelson is optimistic about Tesla's long-term outlook and reiterated a "buy" rating. He believes that Tesla's low-cost, affordable electric vehicles produced in 2025 could be a catalyst for Tesla's stock price to rise.
"Despite the disappointing decline in profits, Tesla, as a low-cost U.S. EV maker, has significant profit potential at a time when prices appear to be nearing an inflection point," Nelson wrote. He believes that Tesla still has a huge competitive advantage in the field of electric vehicles, and is expected to expand its market share and achieve sustained growth through low-cost models.
Tesla, while facing some challenges at the moment, also has unlimited potential. It needs to be more transparent and provide more specific details about costs, margins and sales so that investors and analysts can better assess its long-term prospects. Although Tesla's stock price plummeted, some analysts expressed optimism about its long-term growth prospects, believing that Tesla's competitive advantages in low-cost electric vehicle production and fully self-driving technology are expected to drive Tesla's continued growth.
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