Cathie Wood: People Have No Idea What Tesla Just Revealed

still can justify Tesla's High stock price as its margins are on par with lower valued competing automakers is what an analyst burn Ste rote on Tuesday and what's more the electric vehicle firm offers no obvious Catalyst to spark growth down the road is what the analysts said cutting their price Target on Tesla to $120 a share from 150 and that implies a 33% drop from where the stock traded on Wednesday and Tesla stock price remains high on almost every valuation metric compared to both traditional and higher growth Auto oems and also looks expensive relative to its reduced growth expectations when you measure it against tech companies is what the analyst led by Tony and already the EV maker has slummed aggressively year to date with missed Q for earnings spurring on the route the stock has shed around 30% since the year's start and but despite its underperformance Tesla still holds a massive premium against other Auto firms with a valuation that is sixfold higher than other manufacturers and that is because Tesla historically held a much higher growth rate but that's less the case today and with that being said today Tesla's margins are in line with or us in some cases lower than us Japanese and us oems and it and its forward growth rate is more comparable to Toyota and Honda and lower than that of byd and while Tesla commands premium multiples above large cap Tech firms its margins are significantly lower among this cohort as well and according to the notes soft demand is chipping away at Tesla's production volumes as EV adoption decelerates in Europe and the us while the launch of Highland model in China failed to Showcase a step change in demand and Burnstein lowered its production forecast to 1.98 million for the year against a consensus of 2.06 million and Ted growth will continue into 2025 however Tesla is still forecast to become the highest world's wide volume automaker and bullish investor May point to Tesla's full self-driving technology as a transformative Venture that should justify with stock price over time but Bernstein notes that other manufacturers are also competing in their space and it's also unlikely that Tesla makes makes ground as a robo taxi service as wayo already dominates this field have also pointed out Tesla's Venture into Robotics and AI including the Optimus and Dojo announcements but as with self-driving the firm is pretty behind with CEO Elon Musk downplaying Dojo as a long shot is what Bernstein said and Tesla is the worst performing stock in the S&P 500 Index and Apple has had its own struggles to start 2024 and the so-called magn magnificent 7 stock had a good run but apple and Tesla's continued misfortunes means they have underperformed their big Tech Rivals and Analyst at Jonas trading who claims he coined the moer representing Google meta Nvidia Amazon apple and Tesla said at the end of Feb that the cohort of tech Brands is no more even as the others continue to affection affectionately use the Magnificent 7 title and apple and Tesla Shares are down year down year to date while the four others continue to show gains Tesla is the worst performer of the group showing both a 30% year to De stock Decline and a year-over-year slump of 7% and in fact Tesla is the worst performing stock in the S&P 500 as the company faces slowing EV demand and Rising competition in China and meanwhile apple is still up year-over-year 99% despite the fact that it's down in 2024 so far and the Tim Cook Helm company is dealing with blowback from Regulators both at home and abroad over its anti-competitive practices and coming back to Tesla Ved Bush analyst slashed its price target for Tesla stock warning off a difficult period ahead for the electric vehicle maker following a terrible first quarter for deliveries and analysts have cut their price target for Tesla to $300 a share which was down from $315 a share and that still implies a 66% upside for the stock but the firm said in a note on Wednesday that the outlook for Tesla was uncertain evidenced by difficult first quarter and the Ved Bush analyst estimated that deliveries in China were most likely down 3% to 4% year year per year and that's setting the stage for Tesla to hit only 2 million deliveries for the whole year they projected down from the originally expected 2.1 million deliveries and let's call it like it is quarter 1 deliveries have been a nightmare quarter for Tesla as China demands China demand remains very soft coming out of the gates for 20124 while supply issues like the factory down times the Berlin Fire has impacted the supply there is no denying that this has been a quarter to forget for Elon Musk and Tesla is what the weed Bush analyst said and for Elon Musk this is a fork in the road time to get Tesla through this turble and period otherwise darker days could be ahead and the sagging demand is exacerbated by the fact that that investors are growing tired of ongoing issues within Tesla's leadership and with Elon Musk Elon Musk caused a firestorm earlier this year stating that he might move artificial intelligence projects outside of Tesla and a Delaware Court also recently struck down his 55.8 billion pay package leading Elon Musk to say he'd start shifting Tesla state of incorporation from Delaware to Texas and V Bush still has a high level of confidence and Inter as full self driving technology as well as its AI software growth but the company's challenges are creating a bleer near-term Outlook and while Tesla right now is caught between two waves of growth patience is starting to wear very thing among investors is what the analyst said and there are a handful of things Elon Musk and Tesla can do to reset the trajectory of the EV maker is what the V Bush analyst said corrective measures include offering more guidance on deliveries and profits in 2024 building a strategy to address demand issues in China and and Elon Musk stating his full commitment to being Tesla's CEO for the next 3 to 5 years including its AI projects now this will make Tesla stock very stable and the investors will also be like okay everything is going fine with Tesla and according to V Bush analyst what Tesla stock needs to show right now as a little bit of stability and unified front and present a unified front and we remain bullish on Tesla over the next few years despite the near-term darkstorm demand clouds forming with China however getting through this White Knuckle period will be a defining chapter for Elon Musk and Co in the future of Tesla and other Wall Street analyst have also slashed that price targets for Tesla the stock is down 27% this year diverging sharply from the performance of other Magnificent Seven names such as Nvidia and Microsoft well right now Elon Musk wants you to stop thinking of Tesla as just a car company yes the electric vehicle maker does indeed make electric vehicles but the CEO is hoping people will look beyond that at a particular point Elon Musk has said that Tesla should really be thought of as a roughly a dozen technological startups many of which have little to no correlation with traditional Automotive companies Tesla is currently between two major growth waves Tesla told analyst during the company's January's earnings call we're focusing on making sure that our next growth wave driven by Next Generation vehicle energy storage full cell driving and other projects is executed as well as possible and full self-driving or FSD came into Focus earlier this week when Elon mus told Tesla employees that it would be mandatory for its North American operations to install and activate the software in new Tesla vehicles and to take customers on a short test ride before handing over the car and almost no one actually realizes how well the FSD works is what Elon Musk said and I know this will slow down the delivery process but it is nonetheless a very hard requirement so that's it guys from here today thank you so much for watching please hit the like button and I hope you all have a good day

Channel: Star Investing

Views: 16,423

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Id: o9oAqCBTdhE

Length: 7min 58sec (478 seconds)

Published: Wed May 15 2024