Tesla shares returned more than 9% after declining earnings
Shares of Tesla (NASDAQ: TSLA) rose Monday morning after collapsing late last week following a relatively bullish earnings call. The electric car manufacturer’s shares rose above 9% at 13.00 EST.
Last Wednesday, Tesla reported on revenues for 2021’s year-round guidance and the last quarter of the year. Tesla reported delivery figures just after the New Year, beating the consensus figures by 13 percent and delivering over 936,000 cars in 2021 while producing just over 930,000 units.
Wednesday Earnings Call turned out to be more bullish news for Tesla investors. Musk and Co. reported another $ 17,719B in revenue, an improved gross margin for the automotive industry, increased free cash flow and an impressive $ 2.54 EPS. Wall Street expected revenue of $ 1[ads1]6.65 billion, with an EPS of $ 2.35. Despite the record-breaking quarter, Tesla shares fell sharply last week on Thursday and Friday, which contributed to a significant drop in the technology sector as the market continued to experience blunt sales.
The shares were down 9.89 percent from Wednesday near the end of Friday.
Tesla has not experienced positive days after revenue talks, even when profitability has become a common expectation for the electric car manufacturer’s quarterly talks. Previous trading days after the EC have treated Tesla investors with the perfect inner battle: Buy more or keep what I have?
Despite Tesla’s strong economy for Q4, the market seemed to react to Musk’s quotes regarding Tesla’s future range. During the conversation, the CEO said that Tesla would not introduce any new vehicle models this year, which put an end to speculation about a possible Tesla of 25,000 dollars or the arrival of the Cybertruck, which people have been waiting for over two years to own.
“This lack of product is very strange,” said John Murphy, a Bank of America analyst with a $ 1,300 price tag on Tesla. We estimate that 29 other EV models will be launched on the market. So the market is coming for him, and when we look at market shares going forward, he is going to lose a lot of market shares. We can get into specific numbers, but we expect that he will lose about 50 points market share in the electric car market over the next three to four years, he said on CNBC.
Tesla CEO Elon Musk said the $ 25,000 Tesla would not arrive this year. (Credit: Alwinart / Twitter)
While other companies actually have new products on the market, the expectation is that consumers will go for the car that is most desirable. From Tesla’s perspective, their many years of management in software, EV infrastructure, batteries and manufacturing can give them peace of mind knowing that there will be no more new car models this year. Why continue to expand the range when the current one sells, and sells a lot. Model 3 was Europe’s best-selling electric car, and Tesla sold more electric cars globally in 2021 than any other company. They may be one of the few companies that have a fully engaged business model that only builds electric cars and can do so in massive numbers, but people need cars now, and Teslas may be the most sought after electric cars on the market. The question is when will the other companies catch up and compete?
The lack of a “Product Roadmap” update may have culminated in some losses, but not the 10 percent drop in inventory that will be canceled this morning. Nevertheless, Tesla shares are on the rise again, along with many others in the automotive industry, including Ford (NYSE: F), which gained almost 4% at the time of writing, and Rivian (NASDAQ: RIVN) up almost 12%.
Disclosure: Joey Klender is a TSLA shareholder. He does not own shares in Ford or Rivian, which were also mentioned in this article.
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