Can’t figure Tesla (TSLA) out? Welcome to the club. The stock was down another 5.59% today, April 15, and is now down 31% for 2024.
Is Tesla a growth stock that has temporarily stumbled. You might well think so given the company’s repeated price cuts. Surely, the goal is growing market share.
Or maybe it’s the stock of a company that has suddenly discovered the gospel of profits. You might think so after the company announced on April 15 that it would lay off 10% of its global workforce. “There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle,” said CEO Elon Musk. Tesla recorded a gross profit margin of 17.6% in the fourth quarter, its lowest in more than four years.
Or maybe it’s the stock of a company that has just lost its way. You might think that from reports by Reuters, denied by the company, that it would cancel its plans to build a new lower priced car in an effort to compete with cheaper Chinese electric vehicles. In its earnings call last quarter, management said it aimed for the affordable vehicle to enter production by the end of 2025 and hailed the vehicle as the driver of the next phase of growth for Tesla.
Maybe investors will get some clarity on the company’s identity and strategy when it announced earnings on April 23. Wall Street analysts expect earnings of 36 cents a share against earnings of 73 cents a share in 2023.
I think that strategic clarity is actually more important than quarterly earnings at this point for Tesla.
