The revenue miss did not impress investors as the company’s shares fell by 6.65% on Thursday to close at $207.28.
The stock price of American multinational electric vehicle maker Tesla Inc (NASDAQ: TSLA) is on a downtrend as the company’s revenue for the third quarter missed estimates. Per the results published, Tesla’s Earnings Per Share (EPS) came in at $1.05, a figure better than the 99 cents that were projected by analysts.
The company missed its revenue estimates as it reported $21.45 billion vs the $21.96 billion that was projected by analysts polled by Refinitiv. As the world’s largest electric car maker, the company reported that its net income (GAAP) for Q3 2022 came in at $3.33 billion and that its automotive gross margins held steady at 27.9%.
Despite the inflationary pressures and the broader strain on the global economy, Tesla claims it has a very robust demand for the coming quarter.
“I can’t emphasize enough we have excellent demand for Q4 and we expect to sell every car that we make for as far into the future as we can see,” said Elon Musk, the company’s co-founder and Chief Executive Officer. “The factories are running at full speed and we’re delivering every car we make, and keeping operating margins strong.”
In the company’s earnings call, Tesla revealed that it expects its production rate to grow by at least 50% to match the demand. However, the company gave a gloomy forecast about its delivery rate which it said is likely to fall below a 50% growth rate.
Tesla Stock Gets Suppressed after News of Lower Revenue
The revenue miss did not impress investors as the company’s shares fell by 6.65% on Thursday to close at $207.28. At the earnings call, Elon Musk expressed optimism about the long-term growth projection of the company’s valuation which he noted can surpass that of Apple Inc (NASDAQ: AAPL) and Saudi Arabian Oil Co (TADAWUL: 2222)
“I’m of the opinion that we can far exceed Apple’s current market cap. In fact, I see a potential path for Tesla to be worth more than Apple and Saudi Aramco combined. That doesn’t mean it will happen or will be easy,” he said.
Elon Musk’s optimism, however, did not match those of Berstein tech analyst, Toni Sacconaghi who remained unsatisfied with Tesla’s performance, and Musk’s disposition at the earnings call.
“Aside from the financials, the earnings call didn’t sit well with us,” Sacconaghi said in a note on Thursday. “Answers to many questions on the earnings call were curt and almost dismissive, with CEO Musk instead repeatedly making very bold prognostications about Tesla’s future and capabilities.”
Sacconaghi is now bearish on Tesla in the long term and has maintained a $150 12-month price projection on the company’s stock. This bearish price target is about 30% short of what Tesla stock is trading at today, and should investors go by this projection, they may start shorting the company’s shares.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.