Tesla Sinks 8% Pre-Market After 4Q Profit Miss; Street Sees 25% Downside Risk

Tesla dropped almost 8% in Thursday’s pre-market trading session after the electric vehicle (EV) maker’s fourth-quarter earnings lagged analysts’ forecasts.

Tesla’s (TSLA) 4Q adjusted earnings of $0.80 per share jumped 95% year-over-year but missed analysts’ expectations of $1.02.

Meanwhile, the EV maker reported total sales of $10.74 billion in the quarter, which came in ahead of the Street’s estimates of $10.47 billion. Moreover, the top-line marked a solid year-over-year improvement of 46%, reflecting increased vehicle deliveries, partially offset by an 11% decline in average selling price.

Tesla said the company expects to achieve 50% average annual growth in vehicle deliveries in the coming years. Volumes may even grow at a faster rate in some of the years and 2021 could be one of them, the company projected. (See TSLA stock analysis on TipRanks)

Furthermore, Tesla updated that it is on track to start deliveries of Model Y in 2021 from its Texas and Berlin Gigafactory. It also expects to start shipping Tesla Semi models this year.

Following the earnings release, Wedbush analyst Daniel Ives reiterated a Hold rating and price target of $950 (9.9% upside potential) on the stock. In a note to investors, Ives wrote, “While delivery/production numbers were known and beat the Street’s expectations given the current economic backdrop, investors continue to be laser focused on the profitability picture of TSLA.”

TSLA scores a Hold consensus rating based on 13 Holds, 7 Buys, and 3 Sells. The average analyst price target of $650.21 implies downside potential of about 24.8% to current levels. Shares have soared over 674% over the past year.

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