$TSLA Stock: Watch $160 Support Level and Potential Declines 📉
Wall Street is panicking.
The Media is printing 100 Elon Bad news stories every day.
Stock is selling off.
"OMG! Q1 gross margins!"
"Sales were a bit low in March!"
"Oh no! Layoffs!"
Investors repeat the same mistake over and over - panicking because they are told to panic.
$Tesla Motors(TSLA)$'s stock has had a rough ride, dropping nearly 30% in the first quarter of 2024.
The main reasons behind this slide are hitting a growth plateau, increased competition, and a slowdown in demand.
They've been facing tough competition in China, where sales have been hit, and overall consumer demand has been weaker than expected.
The company's delivery numbers for the first quarter didn't meet expectations, with a total of 368,810 vehicles delivered, which is an 8.5% drop year-over-year and a 20% decrease quarter-over-quarter. Production also slowed down, which isn't helping matters.
In Europe, there are concerns about the plans for more affordable electric vehicles, and in China, the competition is getting hotter with players like $BYD Co., Ltd.(BYDDY)$ and $XIAOMI-W(01810)$ pushing into the market. Xiaomi's entry, in particular, is seen as a threat to Tesla's position in China, offering a cheaper alternative to the Model 3.
Looking back at the fourth quarter of 2023, Tesla's overall revenue only grew by 3% year-over-year, and car sales volume barely budged, growing by just 1%. Operating margins were nearly halved compared to the previous year, and while they reported a significant increase in net income due to a one-time tax benefit, their earnings per share were down by about 39% when excluding that benefit.
Despite delivering a record number of electric vehicles in 2023, the growth in revenue and income was modest, and the storage deployment, which grew significantly, still only accounts for a small fraction of their total income.
The Cybertruck is seen as a potential growth driver for $Tesla Motors(TSLA)$ this year, but its complex manufacturing process might slow down production. Analysts' predictions for the first quarter of 2024 show a further slowdown in revenue growth and net profit for Tesla.
As for the stock price, it's been volatile. After a sharp drop following disappointing delivery numbers, it has rebounded a bit, which might indicate that investors have already factored in the slower growth. The key now will be the company's guidance for the quarter and how they plan to tackle the challenges ahead.
The technical support price level for $Tesla Motors(TSLA)$ 's stock is around $160, and if it falls below that, it could lead to further declines.
On the flip side, a positive earnings report and strong guidance could give the stock a boost back towards its February highs.
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