Shares of EV maker Tesla (TSLA) soared in after-hours trading after the company reported earnings for its third quarter of Fiscal Year 2024. Earnings per share came in at $0.72, which beat analysts’ consensus estimate of $0.60 per share.
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In addition, sales increased by 7.8% year-over-year, with revenue hitting $25.18 billion. However, this missed analysts’ expectations of $25.7 billion. The bump in sales can be attributed to an increase in vehicle deliveries, higher regulatory credits revenue, growth in the Energy/Storage business, and growth in FSD revenue recognition. This was despite a reduction in the average selling prices for its “S3XY” models.
Furthermore, free cash flow gained year-over-year, coming in at $2.74 billion compared to $848 million in Q3 2023.
Tesla’s Outlook
Despite ongoing economic challenges, Tesla forecasts modest growth in vehicle deliveries for 2024, along with a doubling of energy storage deployments on a year-over-year basis. The company also stated that it has enough liquidity to fund its operations and maintain a strong balance sheet during uncertain times.
In terms of profits, Tesla said it continues to innovate and reduce manufacturing costs. It also expects future profits from AI, software, and fleet-based services to grow alongside hardware-related earnings.
Turning to future products, the EV maker noted that new and more affordable vehicles are still on track to be produced in early 2025. These vehicles will use a combination of the next-generation and current-generation platforms, which will allow them to be produced on existing manufacturing lines. This strategy will help the company increase vehicle volumes efficiently and maximize current production capacity before investing in new lines.
Investor Sentiment for TSLA Stock Is Currently Very Negative
Interestingly, it seems like the sentiment among TipRanks investors is currently very negative. At a first glance, things seem pretty positive for Tesla, as 13% 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 13.98%. This suggests that investors of the company are very confident about its future.
However, in the last 30 days, 2.5% of those holding TSLA stock decreased their positions. As a result, the stock’s sentiment is below 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 11 Buys, 16 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 14% year-to-date decline in its share price, the average TSLA price target of $207.83 per share implies 2.78% downside risk. However, it’s worth noting that estimates will likely change following today’s earnings report.
