TESLA: Cathie's call or Crash landing ?
Everyone should have heard the news by now. If not here is the skinny. (see below)
Quick Recap.
On Tue, 02 Apr 2024 - Tesla released its Q1 2024 deliveries results.
It was shockingly low.
In early March 2024, Wall Street consensus was around 470,000 EVs.
Overtime, estimates were revised downwards, over & over again as many expected a weak quarter.
Eventually, the arrived consensus was 431,000 EVs.
Just for the record, Tesla delivered 422,875 EVs (Q1 2023) and 484,507 EVs (Q4 2023).
Market’s downgraded consensus of 431K is still “manageable” given (a) a weak EV market and (b) an even weaker Chinese economy.
When the results were announced, $Tesla Motors(TSLA)$ just fell.
For Q1 2024, Tesla delivered just 386,810 EVs.
Falling short of (1) consensus by -10.25%, (2) original estimates by -17.7%, (3) Q1 2023 deliveries by -8.53% and (4) Q4 2023 deliveries by -20.16%.
If you noticed, there is not even a single positive comparison.
Tesla fans (if you are reading this post) - do you agree?
So far.
On Tue, 02 Apr 2024, Tesla fell by -4.90% to $166.63 per share.
Based on past 5 trading days, it has fallen by -6.70% in total.
On a “brighter” note, despite all the negative and “bad” press swirling around Tesla, Mr Musk still has a fan in Ms Cathie Wood.
She has been foraging and picking up Tesla shares since the beginning of 2024. (see below)
16 Jan 2024
30 January 2024
09 February 2024
14 March 2024
30 March 2024
This follows after her sell off of her stash of Tesla shares (bought cheap!) during Q4 2023 when Tesla was trending higher towards the $270 per share resistant level.
With room for Tesla to fall further, it is likely that Ms Cathie Wood will buy more Tesla shares to “dollar cost average” (DCA) her 2024 purchases; that are definitely a loss (now), even without detailed calculation to ascertain.
Tip of the Iceberg
My viewpoint: (mine & mine only).
In the immediate term, no matter how much Tesla “bottoms”, it will not be its bottomless pit (yet).
The litmus test falls on 23 Apr 2024 (after US market has closed) when Tesla reports its Q1 2024 earnings.
The disappointing 386,810 EVs delivered announced on 02 Apr 2024 will be “translated” into its constituent:
Revenue.
Earnings per share.
Net income.
Operating margin.
This will be the possible 2nd wave of “tumble” that Tesla will have to endure.
Hopefully, Tesla’s (a) Services & other and (b) Energy division, that are smaller than Tesla’s EV core business, would be an even brighter spots this time and help to bump up Tesla’s top & bottom line.
Realistic Buy-in price.
To me a “realistic” buy-in price could be Tesla’s historical $113.06 per share (achieved on 6 Jan 2023) or lower.
Lower (??) because Tesla’s Q1 2024 deliveries is its “lowest” since Q4 2022. (see below)
About US stock, it is a misnomer to say a stock is at the “lowest” (stock price) because there is always room for it to fall further, market-sentiments dependent.
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Do you think Tesla will have 2 rounds of “free fall” - this week & 23 Apr 2023?
Do you think you will consider buying Tesla, a possible sunset stock?
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