Tesla Q4 Earnings Preview: Growth Stalling, Margins Eroding, And Too Expensive (Archive)
Tesla’s sales are stalling, margins compressing, and valuation too rich for comfort.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- My earlier 'Buy' rating on Tesla has not worked out as I placed too much weight on the long-term growth potential without adequate visibility, and interpreted valuations wrongly.
- Now, I have a 'Sell' view as I note that Tesla is having a stall in its automotive sales with no new model launch and delayed Cybertruck ramp-up.
- I believe Tesla's continued pricing cuts are unlikely to be undone, which suggests a more sticky erosion in the margins profile.
- Valuations are also hefty even when compared to the Magnificent 7 as Tesla trades at a 122% premium to the median 1-yr fwd PEs.
- Relative technical analysis of Tesla vs the S&P 500 also suggests there is more downside and hence alpha erosion ahead.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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