Tesla (NASDAQ:TSLA) will be under the Street’s microscope today with the EV giant slated to release 4Q24 results after the close. Investors will be hoping the readout can act as the catalyst for another year of big gains.
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Ahead of the print, Goldman Sachs’ Mark Delaney, an analyst ranked in the top 3% of Wall Street stock experts, has been laying out the key topics to focus on.
Tesla has struggled with margins in recent times as it has enacted a series of price cuts to counter waning demand and intensifying competition so that is one area investors will surely be keen to see progress on. On that front, Delaney expects the automotive non-GAAP gross margin (excluding regulatory credits) to hit 15% in Q4, below the 17.1% recorded in 3Q24 (or ~15.6% excluding the FSD deferred revenue release).
“We believe there will be several puts and takes to gross margin in 4Q qoq, including the incremental incentives Tesla used to support 4Q growth, higher tariffs in 4Q, but also higher sales volumes, and we believe lower materials costs,” the 5-star analyst opined.
Driven by an updated Model Y and the introduction of a more affordable model or models (one is expected to launch in mid-2025), Tesla’s ability to achieve significant growth over the next couple of years will also be a key focus area. The company has set a delivery growth target of 20–30% year-over-year for 2025, though Delaney’s current forecast sits some distance below that at 12%, short of Visible Alpha consensus at 14%. The analyst anticipates Tesla will stick to this target on the earnings call and highlight “good pre-order demand” for the refreshed Model Y.
Commentary and data regarding the progress of Full Self-Driving (FSD), particularly the performance of Version 13 – which Delaney thinks represents a significant improvement over Version 12 – should also be forthcoming.
“We continue to believe the FSD data suggests that Tesla is among the leaders with its AI technology for the auto market, but also that Tesla is unlikely to reach its goal of being safer than a human driver in 2Q25,” Delaney said on the matter.
There should also be updates on the robotaxi, with Tesla aiming to launch a service in Texas and/or California in 2025 using Model 3 and Model Y vehicles, more info on the progress being made with the Optimus robot and commentary about the growth targets for other segments, such as Services and Energy, with Delaney noting that profitability in the latter has been “very strong recently.”
Delaney, however, is playing it safe, sticking to a Neutral rating with a $345 price target – 12% shy of TSLA’s current level. (To watch Delaney’s track record, click here)
Meanwhile, the broader Wall Street view on TSLA is split: 12 call it a Buy, 8 say Sell, and 10 remain in between. The result? A Hold consensus rating. At $339.15, the average target is a little lower than Delaney’s objective and factors in a 12-month slide of ~14%. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
