Xiaolu Chu
Summary
- Tesla, Inc. has recently seen a 78% rally due to better-than-expected vehicle deliveries, but this growth is largely attributed to significant price cuts, which may impact the company’s margins.
- Despite a 35% price cut on all models, Tesla only saw a 10% growth in deliveries, suggesting weak underlying demand. Further price cuts could put pressure on the stock.
- The FY2023 earnings consensus has been revised by -39%, but Tesla’s stock price is 10% higher than at the peak earnings consensus period, indicating the stock is trading on overly bullish sentiment.
Investment Thesis
Tesla, Inc. (NASDAQ:TSLA) has achieved an impressive 160% YTD growth, primarily driven by multiple headline news. Factors contributing to this growth include the increasing adoption of TSLA’s NACS, better-than-expected vehicle deliveries resulting from significant price reductions, and a broad-based rally in the AI thematic sector. Additionally, the market’s lower inflation expectations and recent CPI data have provided further support for high valuation growth stocks like TSLA.
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