Tesla had ‘more misses than hits’ in its third financial quarter

October 18, 2023 03:51 PM PDT | By Invezz

Tesla had ‘more misses than hits’ in its third financial quarter — Image source: Invezz

Gene Munster shares his view on Tesla

The earnings release suggests that Tesla may decide in favour of lowering prices further in the coming months. What it also signals is that the legacy automakers are likely to face big fat challenges in building a successful EV business.

Excluding regulatory credits sales, automotive gross profit margins at 16.3% came in well below 17.5% that experts had forecast. According to Gene Munster of Deepwater Asset Management:

More misses than hits. Automotive gross margin is the central metric because its where the story hinges on, is this a car or tech company. They missed that. That trend is not a friend for Tesla right now.

Tesla shares are still up 120% for the year at writing.

Elon Musk just said AI has the potential to make Tesla $TSLA the most valuable company in the world 🌎🌍🌏 by far

— Evan (@StockMKTNewz) October 18, 2023

Tesla Q3 earnings snapshot

Earned $1.85 billion versus the year-ago $3.3 billion
Per-share earnings also declined from 95 cents to 53 cents
Revenue jumped 9.0% year-over-year to $23.35 billion
Consensus was 73 cents per share on $24.2 billion revenue

Gross margin stood at 17.9% in the third quarter, as per the press release – a 30 basis points decline sequentially and 720 basis points decline versus a year ago. On CNBC’s “Fast Money”, Munster also said today:

They talked about slowing production growth of Model Y and the miles driven by FSD came a bit below what I had expected. So, in the near-term, this was a disappointment.

Munster did note, though, that Tesla Inc is still far ahead of other big automakers in the U.S.

Tesla to start selling the Cybertruck

On Wednesday, the electric vehicles behemoth also said that its much-awaited Cybertruck will go on sale on November 30^th. The Deepwater expert added:

This will be positive for Tesla shares. They don’t have to sell many. They just have to ramp from 5,000 this year to 150,000 next year. Investors will start to see that having a measurable impact on delivery growth.

Watch here: https://www.youtube.com/embed/GJNefIQatzg?feature=oembed

Note that Tesla Inc remains committed to producing around 1.8 million vehicles this year. The EV company is convinced that it will remain ahead of a compound annual growth rate of 50% in 2023.

TSLA had reported a sequential decline in its quarterly deliveries earlier this month (read more).

The post Tesla had ‘more misses than hits’ in its third financial quarter appeared first on Invezz

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