Tesla Stock Surges Despite Earnings Miss: Musk Envisions It as the Future’s Top Company

Tesla shares saw a surprising upswing on Thursday, despite a fourth-quarter earnings report that disappointed some investors. The company reported lower sales and earnings than expected but received a boost from optimistic comments made by CEO Elon Musk.

In the last quarter, Tesla brought in $25.7 billion in sales, with an adjusted earnings per share of $0.73. Analysts had predicted sales of $27.3 billion and earnings of $0.77 per share. This marks a challenging finish for Tesla’s overall financial performance, with net income for the year down to $8.4 billion—23% less than the previous year and a significant drop from 2022’s $14.1 billion. On a positive note, their total revenue improved by 1% to $97.7 billion.

Looking ahead, Tesla aims to return to growth in their core vehicle business by 2025. They also plan to start production of a new driverless taxi, the “Cybercab,” next year and introduce more affordable cars by the first half of 2025.

The market reaction was wild. While shares initially dropped about 5% after the earnings announcement, they rebounded to a 5% gain by Thursday morning. This back-and-forth confused many analysts, who highlighted the disconnect between the stock’s performance and the company’s financial results.

During the earnings call, Musk expressed his belief that Tesla could become the most valuable company in the world, stating, “I see a path for Tesla being worth more than the next top five companies combined.” Currently, Tesla holds the position of the eighth-most valuable company globally, valued at $1.3 trillion.

Some analysts were skeptical. JPMorgan’s Ryan Brinkman noted that the rise in Tesla shares did not correlate with its recent financial performance. He pointed out that the stock price seems detached from the company’s fundamentals.

Musk previously described Tesla’s profit struggles as a phase between two major growth waves, a view supported by some on Wall Street. Analysts anticipate a significant increase in Tesla’s cash flow in the coming years, with projections of over 80% growth by 2025 and another 50% jump by 2026.

In terms of vehicle deliveries, Tesla reported around 496,000 cars shipped in the fourth quarter, making for a total of 1.79 million vehicles sold in 2024. This marked the first annual decline in deliveries since 2016. Despite the setbacks, Tesla’s stock had risen by over 100% in the past year, spurred by excitement over advancements in technology and the company’s possible future under less stringent regulations following political changes.

Concerns about Musk’s outside interests and their impact on Tesla were also noted, but these issues were not addressed during the earnings call. Shareholders raised questions regarding Musk’s political activities and potential conflicts of interest, but these remained unanswered.

As for Musk’s personal wealth, he continues to be the richest person in the world, with a net worth exceeding $410 billion, largely thanks to his stake in Tesla. His influence and visions for the future play a crucial role in shaping investor sentiment. Whether Tesla can navigate its current challenges and meet Musk’s ambitious goals remains to be seen.

Source link

tsla,tesla,tesla stock,tesla earnings