Shares of EV maker Tesla (TSLA) are volatile in after-hours trading after the company reported earnings for its fourth quarter of Fiscal Year 2024. Earnings per share came in at $0.73, which missed analysts’ consensus estimate of $0.76 per share.
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In addition, sales increased by 2.1% year-over-year, with revenue hitting $25.7 billion. This also missed analysts’ expectations of $27.3 billion. However, the bump in sales can be attributed to an increase in vehicle deliveries, higher regulatory credits revenue, and growth in the Energy/Storage business. This was despite a reduction in the average selling prices for its “S3XY” models.
Furthermore, free cash flow fell year-over-year, coming in at $3.58 billion in FY24 compared to $4.36 billion in FY 2023.
Tesla’s Outlook
Looking ahead, Tesla expects its vehicle business to return to growth in 2025 due to advancements in vehicle autonomy and new product introductions. The growth rate will depend on factors such as the pace of autonomy development, production ramp-up, and the broader economic environment. Additionally, energy storage deployments are projected to increase by at least 50% year-over-year in 2025.
Tesla is also aiming to focus on cost reduction and expects its hardware-related profits to be complemented by growing profits from AI, software, and fleet-based services over time. In addition, plans for new, more affordable vehicle models remain on track to be produced in the first half of 2025. Interestingly, these new vehicles will use a combination of the company’s next-generation platform and current platforms, which will allow for efficient production on existing manufacturing lines.
In fact, this approach will help the company achieve significant volume growth of more than 60% over 2024 production levels before investing in new manufacturing lines. Furthermore, the company’s purpose-built Robotaxi product, Cybercab, is scheduled for volume production starting in 2026.
Investor Sentiment for TSLA Stock Is Currently Very Negative
Interestingly, it seems like the sentiment among TipRanks investors is currently positive. Indeed, 11.2% of the portfolios that are tracked by TipRanks have shares of the firm. In addition, the average portfolio weighting allocated towards TSLA among those who do have a position is 13.85%. This suggests that investors of the company are very confident about its future.
In addition, in the last 30 days, 2.1% of portfolios added TSLA to their holdings. As a result, the stock’s sentiment is above the sector average, as demonstrated in the following image:
Is Tesla a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 12 Buys, 10 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 103% rally in its share price over the past year, the average TSLA price target of $339.15 per share implies 13% downside risk. However, it’s worth noting that estimates will likely change following today’s earnings report.
