Topline
Tesla stock tanked Thursday after the company’s earnings report fell flat, as Elon Musk’s electric vehicle goliath grapples with shrinking margins as it expands output.
Tesla CEO Elon Musk is the richest man in the world.
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Key Facts
Shares of Tesla were down roughly 9% to $190 about 45 minutes before Thursday’s official market open, pacing toward Tesla’s lowest opening price since May 26, 2023; the stock is now down about 25% in 2024.
In its fourth-quarter earnings report late Tuesday, Tesla reported $25.2 billion of sales and $0.71 earnings per share, missing average analyst estimates of $25.6 billion and $0.73, according to FactSet.
Tesla’s profits fell 40% last quarter compared to the final period of 2022, while revenue grew a more modest 3% year-over-year.
The slide in profits came as Tesla initiated a series of price cuts on its cars, sending profit margins down significantly, as its 17.6% gross margin during Q4 was its lowest mark since 2019, down more than 600 basis points from last year.
Tesla reported earnings per share of $3.12 for 2023, a 23% decline from 2022’s record $4.07; the company’s $16.6 billion in adjusted earnings before interest, taxes, depreciation and amortization was 13% lower than 2022’s $19.2 billion adjusted EBITDA.
Perhaps most worrisome was Tesla’s vague warning of “notably lower” output in 2024, as analysts slammed Musk and company’s lack of clear guidance.