In 2022, Tesla produced more cars than ever before. But not enough to fulfill its high expectations. Over 1.3 million automobiles were delivered to clients by Elon Musk’s EV company in 2018. Despite rising borrowing rates and ongoing inflation, a 40% year-over-year increase from 2021.
Investors reacted to a disappointing fourth-quarter delivery number posted on New Year’s Day by driving the EV manufacturer’s shares down more than 14% on Tuesday to their lowest level since August 2020. The most popular ticker on the Yahoo Finance platform was Tesla.
Tesla delivered 405,000 units in the fourth quarter, up 18% sequentially, falling short of average expectations of 418,000. However, the amount increased Tesla’s 2022 total deliveries to 1.3 million units. Above its projection of 50% but still representing an increase of 40% year over year.
Tesla inventors are concerned about the market valuation
Due to demand difficulties, many Tesla investors are concerned about the company’s high market valuation. According to Ives, Wall Street anticipates a 35%–40% increase in Tesla deliveries in 2023.
However, the analyst is still optimistic that the business can turn things around and survive any future recession. Furthermore claiming that management only needs to reset investors’ expectations with more “realistic” delivery and financial targets for the upcoming year.
“Musk & Co. need to lay out a more conservative number to hit in this jittery backdrop and rip the band-aid off guidance,” he wrote. The business was recently removed from Wedbush’s “Best Idea List.” Instead, it is a list of top stock market predictions from analysts, despite Ives, who has long been one of Tesla’s strongest supporters.
He declared on Tuesday that “The Cinderella ride is over for Tesla and Musk now needs to navigate the company through this Category 5 dark macro storm.”And given that Wall Street’s predictions of a recession highlight the possibility of reduced consumer spending in 2023, some experts even assert that Tesla stock could fall below $25 per share the following year.
In response to the disappointing findings, JPMorgan analyst Ryan Brinkman lowered Tesla’s earnings projections and price objective.
When it reports later in January, Brinkman expects Tesla to miss the $1.19 consensus forecast for fourth-quarter earnings. Brinkman is currently projecting earnings of $4.60 per share for 2023, down from $4.84. The analyst’s price estimate decreased from $150 to $125. He keeps the stock’s rating at underweight.
Check out how others reacted on this;
Duncan McLeod tweeted, “The Tesla stock wipeout has been spectacular (now down 75% from peak), but the company was grossly overvalued, and probably still is!”
The Tesla stock wipeout has been spectacular (now down 75% from peak), but the company was grossly overvalued, and probably still is!
— Duncan McLeod (@mcleodd) January 3, 2023
Amazing chart pic.twitter.com/Sgv6DEgume
— Duncan McLeod (@mcleodd) January 3, 2023
Meet Kevin sarcastically stated that Tesla has a “demand problem.” He tweeted, “Tesla stock is down 9% after missing delivery expectations by 3%, yet Wall Street conveniently forgets that deliveries growing from 343,000 in Q3 to over 405,000 in Q4 represents a 72% annualized growth rate (18% per quarter) HUGE!! Oh but wait, $TSLA has a “demand problem.”
Tesla stock is down 9% after missing delivery expectations by 3%, yet Wall Street conveniently forgets that deliveries growing from 343,000 in Q3 to over 405,000 in Q4 represents a 72% annualized growth rate (18% per quarter) HUGE!!
Oh but wait, $TSLA has a “demand problem” 🤡
— Meet Kevin (@realMeetKevin) January 3, 2023
William LeGate wrote, “In case anyone was wondering, this is what happened to Tesla’s stock today (in Europe… US markets are closed today, and the stock is expected to crash on open) $TSLA.”
Lots of bad news already baked into Tesla’s stock. That said, a miss is a miss and no rose colored glasses here as Musk needs to set realistic/hittable 2023 delivery/financial targets when they report earnings. 40% yearly delivery growth in this macro is still very respectable
— Dan Ives (@DivesTech) January 3, 2023
Dan Ives also stated that “a miss is a miss and no rose colored grasses here.” He suggested what Musk should do for the betterment of the company.
Another twitter user wrote, “When you were able to dump $40B of Tesla stock on naive retail investors before Tesla shares tanked:” He also shared a picture of Musk dancing. He sarcastically pointed out Elon Musk to be the reason for Tesla’s falling shares.
When you were able to dump $40B of Tesla stock on naive retail investors before Tesla shares tanked: pic.twitter.com/n4YloqFMZu
— High Yield Harry (@HighyieldHarry) December 27, 2022