What Next For Tesla Stock?

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Tesla Stock (NASDAQ:TSLA) rose nearly 16% over the past week, outperforming the S&P 500, which gained about 3% over the same period. Although Tesla stock often moves with little news flow, there were some notable developments over the past week. First, although Covid-19 cases in the US are on the rise amid the spread of the more infectious Omicron virus variant, investors are less concerned about the economic impact this time around, as studies have shown the variant is likely much less severe. Is. Infection. In addition, the US FDA recently granted emergency use authorization for oral COVID therapeutics from Merck and Pfizer last week, further easing concerns about the recent virus escalation impact. That has helped broader markets and high-beta stocks like Tesla. Separately, Tesla is clearly taking further steps to secure its battery supply chain, signing a new battery supply deal with miner Syrah Resources for graphite, a battery anode material. Investors also have strong expectations of Tesla’s delivery numbers for Q4 2021, which should be reported during the first week of January.

Now, is Tesla stock poised to rise? Based on our machine learning analysis of stock price trends over the past ten years, TSLA stock has a 60% chance of growth in the next month (twenty one trading days). View our analysis Tesla Chance of Rise for more information.

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Day Five: TSLA 16%, vs. S&P 500 3.1%; best performing market

(4% chance of occurrence)

  • Tesla Stock 16% rose That compares to the broader market (S&P500), which is up nearly 3%, in the five-day trading period ending 12/29/2021.
  • A change of 16% or more in five trading days has a 4% chance of occurrence, which has happened 96 times out of 2514 times in the past ten years.

Day 10: TSLA 13%, vs. S&P 500 3%; best performing market

(14% chance of occurrence)

  • Tesla Stock 13% rose Compared to the broader market (S&P500), that grew 3%.
  • A change of 13% or more in ten trading days has a 14% chance of occurrence, which has happened 350 out of 2515 times in the past ten years.

Twenty One Days: TSLA -4.5%, vs. S&P 500 2.8%; best performing market

(31% chance of occurrence)

  • Tesla Stock decline -4.5% Compared to the broader market (S&P500), it gained 2.8% in the twenty-one trading day ended 12/29/2021.
  • A change of -4.5% or more in twenty one trading days has a 31% chance of occurrence, which has happened 772 times out of 2515 times in the past ten years.

Looking for more information on Tesla’s valuation and financial performance in recent years? View our dashboard Tesla Revenue And Tesla Valuation for more information.

Below you’ll find our previous coverage of Tesla stock where you can track our outlook over time.

[12/13/2021] Why we think Tesla stock remains overvalued

Tesla Stock (NASDAQ:TSLA) soared nearly 38% this year to $1,000, pushing the company’s market cap past the exclusive $1 trillion mark. Tesla has been one of the hottest speed plays in the current market. Despite the COVID-19 pandemic and the ongoing semiconductor shortage, the company’s execution has been solid, with nearly 70% year-on-year growth in 2021. Tesla is also confident of growing deliveries by over 50%. Every year over a multi-year period as it expands vehicle production facilities in Berlin, Texas and Shanghai, and launches new models. The quick shift toward greener and more sustainable forms of energy is also driving greater investor interest in Tesla, which remains the top global EV play.

While Tesla’s recent execution has been commendable, we remain negative on Tesla’s stock at its current valuation. With a market cap of nearly $1 trillion, Tesla’s business stands at a relatively high 120x projected 2022 earnings and is essentially worth more than the ten largest automotive companies combined. We think this is excessive for a few reasons. First, it’s likely that the EV market is about to get a lot more competitive. Barriers to entry are not very high, products are not very complex compared to internal combustion engines and mainstream automotive companies are investing in mass manufacturing. For example, VW alone plans to invest about $100 billion for its EV transition over the next five years. We don’t think Tesla is going to corner the auto market in the long run, because car buyers love diversity. If mainstream players eventually deliver attractive EVs that are well received with customers, it could change the story around the auto major, and potentially hurt the valuations of pure-play EV players like Tesla. could.

Tesla’s full self-driving system is also noted as a big driver of its valuation, the company’s flagship launch in terms of autonomous mile logs, but it’s unlikely to be a winner, either. market takes. Also, Tesla seems to be losing some momentum here, like FSD sales Growth is cooling off, with fewer Tesla drivers apparently opting for the system when they buy new vehicles. We value Tesla’s stock at approximately $610 per share, which is approximately 40% below its current market price. View our analysis Tesla Valuation: Is TSLA Stock Expensive or Cheap? For more on Tesla’s valuation and how it compares with peers.

[10/21/2021] Is Tesla stock still overvalued after third quarter results?

Tesla (NASDAQ:TSLA) Published stronger than expected set of Q3 2021 results despite ongoing chip shortages and supply chain issues hitting the automotive industry. While Tesla’s adjusted EPS rose nearly 2.5x to $1.86, about $0.34 ahead of our estimates, Tesla Revenue grew 57% year-over-year to approximately $13.75 billion, which is the opposite of our estimate of $13.50 billion. The results are driven by strong demand for its mass-market Model Y and 3 vehicles, which saw deliveries increase 87% year-over-year, and also by the production ramp at the Shanghai Gigafactory, which is now comparable to that of Tesla’s Fremont. Produces more cars. California Plant.

Tesla’s margins have also been running high. Automotive gross margin, excluding regulatory credits, increased to 28.8% in Q3, up from 23.7% last year and 25.8% in Q2. Now Tesla’s gross margin is already well ahead of the broader auto industry average margin of less than 10% [1], and we think they have room to grow a bit more in the long run, as Tesla drives up sales of its refreshed Model S and X luxury vehicles and higher software sales as well. That said, ongoing supply chain issues and the planned opening of Texas and Berlin production facilities in the coming months could put some pressure on Tesla’s costs.

We also raised our price estimate for Tesla stock modestly to approximately $610 per share, taking into account the company’s strong revenue growth, expanding margins, and upside from software sales. However, our price estimate is still about 30% below the current market price of $866 per share, as increased competition in the EV space from mainstream automakers and concerns about higher inflation and rising interest rates are driving the valuations of high-growth stocks. can cause damage. Still, our $600 billion-plus market cap estimate for Tesla is about 2x the market cap of Toyota, the most valuable mainstream auto company. View our analysis Tesla Valuation: Is TSLA Stock Expensive or Cheap? For more on Tesla’s valuation and how it compares with peers.

[10/18/2021] Will Tesla stock rise after 2021 third quarter earnings?

Tesla (NASDAQ:TSLA) It is expected to publish its Q3 2021 results after the market closes on Wednesday, October 20. Electric vehicle Belvedere has already provided delivery figures for the quarter, noting that it sold a record 241,300 vehicles, marking a 20% and one-year sequential increase. Year-over-year growth of approximately 73%, despite the ongoing semiconductor crunch and logistics challenges. (See update below) So how’s Tesla’s expected quarterly results trend?

We expect revenue to be approximately $13.6 billion, slightly ahead of the consensus estimate of $13.50 billion. This will mark an increase of 54.5% over the previous year. Revenue is also expected to grow by around 13% on a sequential basis. While Tesla’s mass-market vehicles, the Model 3 and Y, are likely to remain the biggest drivers of sales, the company temporarily halted production for a part of Q2 after the company temporarily halted production to make way for advanced models. It has also ramped up production of its premium vehicles. Tesla’s recent strength in China is also likely to be instrumental to this quarter’s results.

We expect Tesla’s adjusted EPS to come in at approximately $1.52 per share — nearly 2 times last year’s figure and slightly ahead of the consensus EPS estimate of $1.50. Profit growth is likely to be driven by Tesla’s higher delivery volumes, which should continue to improve its fixed cost absorption, and also by higher software sales related to the full self-driving option. Tesla recently launched a new $200 subscription for software, and we think this could drive sales of the software as well. That said, it’s possible that Tesla could see some pressure due to the ongoing component supply crisis and rising logistics costs.

Overall, while growth is expected to remain strong, we still think Tesla’s stock is expensive. At the current price of about $840 per share, the stock trades at about 155x Consensus 2021 earnings and about 16.5x 2021 revenue. Tesla’s market cap is also nearly 3 times that of Toyota, which is the biggest car marker. That being said, Tesla’s stock still has momentum, and if the company is able to deliver…

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