down 35% since the beginning of the year. tesla's (NASDAQ:TSLA) Issues such as high interest rates and slowing demand for electric vehicles (EVs) are weighing on business results, and stock prices are stagnant. However, in terms of investor psychology, It's improving After the company's first quarter results conference, CEO Elon Musk outlined its vision for the future.
Will the controversial billionaire over-promise and under-deliver, or is this the beginning of a new sustainable bull market? A deeper dive into what will happen over the next five years Let's have A store that stores Tesla inventory.
First quarter earnings weren't that impressive
With Tesla's stock price up nearly 20% since the company's April 23 earnings report, casual observers could be forgiven for assuming the company is doing well. It wasn't. In fact, they were the opposite.Sales decreased by 9% YoY comparison While reaching $21.3 billion, Earnings per share (EPS) of 45 cents was below the analyst consensus of 51 cents.
Overall, Tesla sells fewer cars for less money. This is largely related to macroeconomic issues such as high interest rates, which make financing difficult and reduce demand for new cars. Management sought to address this challenge by lowering prices across the company's lineup. But while these efforts likely limit the decline in sales, Tesla's once-high operating margins have also eroded, falling from 11.4% a year ago to just 5.5%.
CEO Elon Musk has suggested that Tesla is more than just a car company. However, approximately 86% of sales in the first quarter were automotive sales. Additionally, industries such as energy storage and services posted modest growth rates (7% and 25%, respectively), but not enough to drive change.
Tesla is not a car company – or is it?
Tesla's recent stock price surge amid weak business performance can only be explained by investors' confidence in Elon Musk's ability to weather the storm. During the company's first-quarter earnings call, the controversial billionaire emphasized Tesla's long-term strategy. This includes The rollout of more affordable options will accelerate as early as early 2025.
More importantly, Musk said the new vehicle will use Tesla's existing Model 3 production line, compared to new platforms like the Cybertruck, which had to overcome significant production delays and cost overruns. It claims to reduce complexity in the supply chain. musk It also highlights Tesla's potential in autonomous driving. It is also equipped with a robotaxi, which is expected to be announced in August.
Analysts at UBS predict that the self-driving taxi market could be worth as much as $2 trillion by 2030. And this will certainly be ample opportunity for Tesla to grow its traditional taxi market. EV business A distant story.but that It remains unclear when or if this technology will be ready for widespread use.
What does the next five years have in store for Tesla?
What Tesla's history gives us be very clear Lesson: Don't bet on Elon Musk long term. The company has grown over 900% over the past five years under his visionary leadership, and there is no sign that he will be successful anytime soon.
That said, Mr. Musk also has a track record of over-promising and under-delivering. The executive has frequently pushed back the schedule for fully autonomous vehicles and produced vehicles (such as the Cybertruck) at significantly higher selling prices than expected. Considering this, I think Investors are placing too much trust in his recent statements.and in the forward price versus revenue (P/E) is a multiple of 63, and given the deteriorating fundamentals, Tesla's valuation is starting to look like it's on the rise.
Tesla remains a great bet on Musk's leadership and the potential for a transition away from car dependence. And we believe it is likely to outperform the market over the next five years.but The current situation looks tough and investors may want to wait for the stock price to fall before buying the stock.
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Will Ebifang has no position in any stocks mentioned. The Motley Fool has a position in and recommends Tesla. The Motley Fool has a disclosure policy.
What will Tesla's stock price be like in 5 years?Originally published by The Motley Fool
