2024-01-24 16:19:47 ET
Tesla Inc (NASDAQ: TSLA) is trending down in extended hours on Wednesday after reporting disappointing results for its fourth financial quarter.
What else is weighing on Tesla stock?
The stock is in the red because total gross margins took a 620 basis points hit in the recently concluded quarter.
That metric printed at 17.6% versus 23.8% in the same quarter last year; part of the reason why Adrian Yanoshik – a Redburn Atlantic analyst is dovish on the electric vehicles behemoth. On Wednesday, he told clients in a research note:
We identify a widening gap between expectations and the margin and [free cash flow] challenges faced by slowing near-term growth.
His “sell” rating on comes with a $170 price target that suggests about an 18% downside from here.
Watch here: https://www.youtube.com/embed/wVzDrfOiUE8?feature=oembedNotable figures in Tesla Q4 earnings release
Earned $7.92 billion versus the year-ago $3.69 billion
Per-share earnings also declined from $1.07 to $2.27
Adjusted EPS printed at 71 cents as per the press release
Revenue jumped 3.0% year-over-year to $25.17 billion
Consensus was 74 cents a share on $25.60 billion in revenue
The earnings report arrives a couple weeks after Tesla Inc again lowered prices of its vehicles in China. Yanoshik also said in his research note today:
Pricing – amid increasingly oversupplied EVs – will dominate any margin benefit from lower commodity prices in the coming quarters, in our estimation.
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