1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock

Motley Fool2023-02-02

Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. ...

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Comments

romanc9
2023-02-02
romanc9
Well if what the writer here said the Tesla profit will etode, that will go the same for all other car manufacturers. Then the question at that time will be who can emerged as a EV or car manufacturers that still make profitable profit.. I had said in many writers that downplay Musk's ability and capability, I won't bet against Musk. He is a brilliant creator and marketing fellow. FYI, I bought the share at $199..i am still holding that it will soon split again that Musk will create more wealth for investors that had the trust in his leadership.
- 老实哥哥:
  [微笑]
- mel18:
  hmm
- OCY:
  Y
- och:
  k
- u寶寶:
  [微笑]
Andrew cub
2023-02-02
Andrew cub
Now he said Tank,later he said buy
Danielng
2023-02-02
Danielng
Ignorant. 15% margins is nothing to poo poo on for a EV coy. Look at other EV companies struggling to keep up. Tesla will eat them for breakfast. ICE WILL be phased out for sure.
badumdum
2023-02-02
badumdum
Follow the price action. Don't be a goondu and short a rising stock like Tesla. You will end up being being steamrolled
- AlfonsoDex:
  ok
Karen333
2023-02-02
Karen333
I keep seeing these very well articulated articles talking about the negativities Of Tesla. As Isaid in my various comments throughout the past few months, Tesla has an extraordinary market position, competitive position and operates in one of the largest growth industries of our time. The risk is in management and execution. It is a solid buy and will be the stock of the decade.
- TKCat:
  ok
- LGC1956:
  Ok
- Todkie:
  Ok
- kk14:
  q
- Howieeeee:
  Yeah
Guavaxf30
2023-02-02
Guavaxf30
That's what I have been seeing too. But it won't tank so fast. Presently, the market is still on FOMO herd mentality.

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After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/\">Source Link</a>\n\n</div>\n","source":"fool_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-02 19:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/","article_id":"2308403758","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2308403758","pubTimestamp":1675337124,"columns":[],"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"A focus on production growth misses the big picture.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"特斯拉多头犯了一个错误，为什么它可能会坦克股票","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{},"content_text":"Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.Tesla is projecting its EV production will grow yet again in 2023. But that doesn't mean the stock is a buy. Here's what Tesla bulls are missing that could tank the stock in 2023.Q4: No big surprisesTesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.For all of 2022, Tesla's net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren't any major hiccups. Many investors cheered this news. But this doesn't solve Tesla's major issue at the moment: maintaining demand for its vehicles while pricing them profitably.TSLA Net Income (TTM) data by YCharts.All signs point to margin compressionRestricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla's profit margins are likely headed much lower. You can already see it in the company's gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.The stock is wildly overvaluedTesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla's revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.If Tesla's net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla's stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.Unless Musk can pull another rabbit out of his hat, Tesla's stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9955863712,"gmtCreate":1675339109437,"gmtModify":1676538994545,"author":{"id":"4102495020619380","authorId":"4102495020619380","name":"romanc9","avatar":"https://static.tigerbbs.com/76bfe37245defa055adfff7453f1520f","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":2,"crmLevelSwitch":1,"idStr":"4102495020619380","authorIdStr":"4102495020619380"},"htmlText":"Well if what the writer here said the Tesla profit will etode, that will go the same for all other car manufacturers. Then the question at that time will be who can emerged as a EV or car manufacturers that still make profitable profit.. I had said in many writers that downplay Musk's ability and capability, I won't bet against Musk. He is a brilliant creator and marketing fellow. FYI, I bought the share at $199..i am still holding that it will soon split again that Musk will create more wealth for investors that had the trust in his leadership.&nbsp;","listText":"Well if what the writer here said the Tesla profit will etode, that will go the same for all other car manufacturers. Then the question at that time will be who can emerged as a EV or car manufacturers that still make profitable profit.. I had said in many writers that downplay Musk's ability and capability, I won't bet against Musk. He is a brilliant creator and marketing fellow. FYI, I bought the share at $199..i am still holding that it will soon split again that Musk will create more wealth for investors that had the trust in his leadership.&nbsp;","text":"Well if what the writer here said the Tesla profit will etode, that will go the same for all other car manufacturers. Then the question at that time will be who can emerged as a EV or car manufacturers that still make profitable profit.. I had said in many writers that downplay Musk's ability and capability, I won't bet against Musk. He is a brilliant creator and marketing fellow. FYI, I bought the share at $199..i am still holding that it will soon split again that Musk will create more wealth for investors that had the trust in his leadership.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":12,"commentSize":9,"repostSize":0,"link":"https://ttm.financial/post/9955863712","repostId":2308403758,"repostType":2,"repost":{"id":"2308403758","kind":"highlight","pubTimestamp":1675337124,"share":"https://ttm.financial/m/news/2308403758?lang=&edition=fundamental","pubTime":"2023-02-02 19:25","market":"us","language":"en","title":"1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2308403758","media":"Motley Fool","summary":"A focus on production growth misses the big picture.","content":"<html><head></head><body><p>Electric vehicle (EV) pioneer <a href=\"https://laohu8.com/S/TSLA\">Tesla</a> had a rough 2022. After it grew into one of the world&#39;s largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.</p><p>Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.</p><p>Tesla is projecting its EV production will grow yet again in 2023. But that doesn&#39;t mean the stock is a buy. Here&#39;s what Tesla bulls are missing that could tank the stock in 2023.</p><h2>Q4: No big surprises</h2><p>Tesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.</p><p>For all of 2022, Tesla&#39;s net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.</p><p>Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren&#39;t any major hiccups. Many investors cheered this news. But this doesn&#39;t solve Tesla&#39;s major issue at the moment: maintaining demand for its vehicles while pricing them profitably.</p><p><img src=\"https://static.tigerbbs.com/8ca407cedfe5c9a8b0642650f463e17a\" tg-width=\"720\" tg-height=\"449\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>TSLA Net Income (TTM) data by YCharts.</p><h2>All signs point to margin compression</h2><p>Restricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.</p><p>Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.</p><p>On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla&#39;s profit margins are likely headed much lower. You can already see it in the company&#39;s gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.</p><p>Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.</p><h2>The stock is wildly overvalued</h2><p>Tesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla&#39;s revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.</p><p>If Tesla&#39;s net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.</p><p>At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla&#39;s stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.</p><p>Unless Musk can pull another rabbit out of his hat, Tesla&#39;s stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-02 19:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2308403758","content_text":"Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.Tesla is projecting its EV production will grow yet again in 2023. But that doesn't mean the stock is a buy. Here's what Tesla bulls are missing that could tank the stock in 2023.Q4: No big surprisesTesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.For all of 2022, Tesla's net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren't any major hiccups. Many investors cheered this news. But this doesn't solve Tesla's major issue at the moment: maintaining demand for its vehicles while pricing them profitably.TSLA Net Income (TTM) data by YCharts.All signs point to margin compressionRestricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla's profit margins are likely headed much lower. You can already see it in the company's gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.The stock is wildly overvaluedTesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla's revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.If Tesla's net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla's stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.Unless Musk can pull another rabbit out of his hat, Tesla's stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":105706652,"gmtCreate":1675339484124,"gmtModify":1675339496881,"authorId":4091661349327720,"author":{"id":4091661349327720,"idStr":"4091661349327720","authorId":4091661349327720,"name":"老实哥哥","avatar":"https://static.tigerbbs.com/c10328a1601529efccf288ff2df98592","vip":1,"currentWearingBadge":{"badgeId":"1026c425416b44e0aac28c11a0848493-2","templateUuid":"1026c425416b44e0aac28c11a0848493","name":"Senior Tiger","description":"Join the tiger community for 1000 days","bigImgUrl":"https://static.tigerbbs.com/0063fb68ea29c9ae6858c58630e182d5","smallImgUrl":"https://static.tigerbbs.com/96c699a93be4214d4b49aea6a5a5d1a4","grayImgUrl":"https://static.tigerbbs.com/35b0e542a9ff77046ed69ef602bc105d","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2024.05.07","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1001},"crmLevel":2,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955863712,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">[微笑]</span>","text":"<span class=\"s1\">[微笑]</span>","html":"<span class=\"s1\">[微笑]</span>"},{"id":105706646,"gmtCreate":1675339371927,"gmtModify":1675339385606,"authorId":4097201280076440,"author":{"id":4097201280076440,"idStr":"4097201280076440","authorId":4097201280076440,"name":"mel18","avatar":"https://community-static.tradeup.com/news/cb8392cdbd4f593469aed779f484434a","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955863712,"type":1,"supId":0,"prevId":0,"content":"<u>hmm</u>","text":"<u>hmm</u>","html":"<u>hmm</u>"},{"id":105706641,"gmtCreate":1675339349067,"gmtModify":1675339367147,"authorId":3579472950975074,"author":{"id":3579472950975074,"idStr":"3579472950975074","authorId":3579472950975074,"name":"OCY","avatar":"https://community-static.tradeup.com/news/7cb8744530addae1ce9dcac8bfcdb8d7","vip":1,"currentWearingBadge":{"badgeId":"972123088c9646f7b6091ae0662215be-3","templateUuid":"972123088c9646f7b6091ae0662215be","name":"Legendary Trader","description":"Total number of securities or futures transactions reached 300","bigImgUrl":"https://static.tigerbbs.com/656db16598a0b8f21429e10d6c1cb033","smallImgUrl":"https://static.tigerbbs.com/03f10910d4dd9234f9b5702a3342193a","grayImgUrl":"https://static.tigerbbs.com/0c767e35268feb729d50d3fa9a386c5a","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2021.12.28","exceedPercentage":"93.63%","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1100},"crmLevel":9,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955863712,"type":1,"supId":0,"prevId":0,"content":"<u>Y</u>","text":"<u>Y</u>","html":"<u>Y</u>"},{"id":105706638,"gmtCreate":1675339326074,"gmtModify":1675339339012,"authorId":3565663543754207,"author":{"id":3565663543754207,"idStr":"3565663543754207","authorId":3565663543754207,"name":"och","avatar":"https://static.tigerbbs.com/1c195b2a32a90ae2210984600e352644","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955863712,"type":1,"supId":0,"prevId":0,"content":"<u>k</u>","text":"<u>k</u>","html":"<u>k</u>"},{"id":105706635,"gmtCreate":1675339307557,"gmtModify":1675339331612,"authorId":4104409638095460,"author":{"id":4104409638095460,"idStr":"4104409638095460","authorId":4104409638095460,"name":"u寶寶","avatar":"https://static.itradeup.com/news/47ca2cc136a417355402d82ec28eb9d7","vip":1,"crmLevel":2,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955863712,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">[微笑]</span>","text":"<span class=\"s1\">[微笑]</span>","html":"<span class=\"s1\">[微笑]</span>"}],"langContent":"EN"},{"id":9955863349,"gmtCreate":1675338631482,"gmtModify":1676538994511,"author":{"id":"4097112435042780","authorId":"4097112435042780","name":"Andrew cub","avatar":"https://static.tigerbbs.com/b5a04c94ed8355d7edc5ccec2886a154","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":6,"crmLevelSwitch":1,"idStr":"4097112435042780","authorIdStr":"4097112435042780"},"htmlText":"Now he said Tank,later he said buy","listText":"Now he said Tank,later he said buy","text":"Now he said Tank,later he said buy","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9955863349","repostId":2308403758,"repostType":4,"repost":{"id":"2308403758","kind":"highlight","pubTimestamp":1675337124,"share":"https://ttm.financial/m/news/2308403758?lang=&edition=fundamental","pubTime":"2023-02-02 19:25","market":"us","language":"en","title":"1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2308403758","media":"Motley Fool","summary":"A focus on production growth misses the big picture.","content":"<html><head></head><body><p>Electric vehicle (EV) pioneer <a href=\"https://laohu8.com/S/TSLA\">Tesla</a> had a rough 2022. After it grew into one of the world&#39;s largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.</p><p>Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.</p><p>Tesla is projecting its EV production will grow yet again in 2023. But that doesn&#39;t mean the stock is a buy. Here&#39;s what Tesla bulls are missing that could tank the stock in 2023.</p><h2>Q4: No big surprises</h2><p>Tesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.</p><p>For all of 2022, Tesla&#39;s net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.</p><p>Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren&#39;t any major hiccups. Many investors cheered this news. But this doesn&#39;t solve Tesla&#39;s major issue at the moment: maintaining demand for its vehicles while pricing them profitably.</p><p><img src=\"https://static.tigerbbs.com/8ca407cedfe5c9a8b0642650f463e17a\" tg-width=\"720\" tg-height=\"449\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>TSLA Net Income (TTM) data by YCharts.</p><h2>All signs point to margin compression</h2><p>Restricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.</p><p>Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.</p><p>On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla&#39;s profit margins are likely headed much lower. You can already see it in the company&#39;s gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.</p><p>Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.</p><h2>The stock is wildly overvalued</h2><p>Tesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla&#39;s revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.</p><p>If Tesla&#39;s net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.</p><p>At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla&#39;s stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.</p><p>Unless Musk can pull another rabbit out of his hat, Tesla&#39;s stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-02 19:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2308403758","content_text":"Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.Tesla is projecting its EV production will grow yet again in 2023. But that doesn't mean the stock is a buy. Here's what Tesla bulls are missing that could tank the stock in 2023.Q4: No big surprisesTesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.For all of 2022, Tesla's net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren't any major hiccups. Many investors cheered this news. But this doesn't solve Tesla's major issue at the moment: maintaining demand for its vehicles while pricing them profitably.TSLA Net Income (TTM) data by YCharts.All signs point to margin compressionRestricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla's profit margins are likely headed much lower. You can already see it in the company's gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.The stock is wildly overvaluedTesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla's revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.If Tesla's net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla's stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.Unless Musk can pull another rabbit out of his hat, Tesla's stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9955869719,"gmtCreate":1675338398731,"gmtModify":1676538994495,"author":{"id":"3567242381966976","authorId":"3567242381966976","name":"Danielng","avatar":"https://community-static.tradeup.com/news/5cd5b4aefd2b0994474d489d4d1c2904","vip":1,"hat":"https://static.tigerbbs.com/4c5ceab71416b120bab4604c0754b52a","crmLevel":7,"crmLevelSwitch":1,"idStr":"3567242381966976","authorIdStr":"3567242381966976"},"htmlText":"Ignorant. 15% margins is nothing to poo poo on for a EV coy. Look at other EV companies struggling to keep up. Tesla will eat them for breakfast. ICE WILL be phased out for sure.","listText":"Ignorant. 15% margins is nothing to poo poo on for a EV coy. Look at other EV companies struggling to keep up. Tesla will eat them for breakfast. ICE WILL be phased out for sure.","text":"Ignorant. 15% margins is nothing to poo poo on for a EV coy. Look at other EV companies struggling to keep up. Tesla will eat them for breakfast. ICE WILL be phased out for sure.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9955869719","repostId":2308403758,"repostType":2,"repost":{"id":"2308403758","kind":"highlight","pubTimestamp":1675337124,"share":"https://ttm.financial/m/news/2308403758?lang=&edition=fundamental","pubTime":"2023-02-02 19:25","market":"us","language":"en","title":"1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2308403758","media":"Motley Fool","summary":"A focus on production growth misses the big picture.","content":"<html><head></head><body><p>Electric vehicle (EV) pioneer <a href=\"https://laohu8.com/S/TSLA\">Tesla</a> had a rough 2022. After it grew into one of the world&#39;s largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.</p><p>Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.</p><p>Tesla is projecting its EV production will grow yet again in 2023. But that doesn&#39;t mean the stock is a buy. Here&#39;s what Tesla bulls are missing that could tank the stock in 2023.</p><h2>Q4: No big surprises</h2><p>Tesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.</p><p>For all of 2022, Tesla&#39;s net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.</p><p>Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren&#39;t any major hiccups. Many investors cheered this news. But this doesn&#39;t solve Tesla&#39;s major issue at the moment: maintaining demand for its vehicles while pricing them profitably.</p><p><img src=\"https://static.tigerbbs.com/8ca407cedfe5c9a8b0642650f463e17a\" tg-width=\"720\" tg-height=\"449\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>TSLA Net Income (TTM) data by YCharts.</p><h2>All signs point to margin compression</h2><p>Restricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.</p><p>Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.</p><p>On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla&#39;s profit margins are likely headed much lower. You can already see it in the company&#39;s gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.</p><p>Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.</p><h2>The stock is wildly overvalued</h2><p>Tesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla&#39;s revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.</p><p>If Tesla&#39;s net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.</p><p>At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla&#39;s stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.</p><p>Unless Musk can pull another rabbit out of his hat, Tesla&#39;s stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-02 19:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2308403758","content_text":"Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.Tesla is projecting its EV production will grow yet again in 2023. But that doesn't mean the stock is a buy. Here's what Tesla bulls are missing that could tank the stock in 2023.Q4: No big surprisesTesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.For all of 2022, Tesla's net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren't any major hiccups. Many investors cheered this news. But this doesn't solve Tesla's major issue at the moment: maintaining demand for its vehicles while pricing them profitably.TSLA Net Income (TTM) data by YCharts.All signs point to margin compressionRestricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla's profit margins are likely headed much lower. You can already see it in the company's gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.The stock is wildly overvaluedTesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla's revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.If Tesla's net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla's stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.Unless Musk can pull another rabbit out of his hat, Tesla's stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9955860138,"gmtCreate":1675337891424,"gmtModify":1676538994297,"author":{"id":"3582072879359907","authorId":"3582072879359907","name":"badumdum","avatar":"https://static.tigerbbs.com/858c953c6d746cceced02c5851bce220","vip":1,"crmLevel":9,"crmLevelSwitch":0,"idStr":"3582072879359907","authorIdStr":"3582072879359907"},"htmlText":"Follow the price action. Don't be a goondu and short a rising stock like Tesla. You will end up being being steamrolled","listText":"Follow the price action. Don't be a goondu and short a rising stock like Tesla. You will end up being being steamrolled","text":"Follow the price action. Don't be a goondu and short a rising stock like Tesla. You will end up being being steamrolled","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9955860138","repostId":2308403758,"repostType":2,"repost":{"id":"2308403758","kind":"highlight","pubTimestamp":1675337124,"share":"https://ttm.financial/m/news/2308403758?lang=&edition=fundamental","pubTime":"2023-02-02 19:25","market":"us","language":"en","title":"1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2308403758","media":"Motley Fool","summary":"A focus on production growth misses the big picture.","content":"<html><head></head><body><p>Electric vehicle (EV) pioneer <a href=\"https://laohu8.com/S/TSLA\">Tesla</a> had a rough 2022. After it grew into one of the world&#39;s largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.</p><p>Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.</p><p>Tesla is projecting its EV production will grow yet again in 2023. But that doesn&#39;t mean the stock is a buy. Here&#39;s what Tesla bulls are missing that could tank the stock in 2023.</p><h2>Q4: No big surprises</h2><p>Tesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.</p><p>For all of 2022, Tesla&#39;s net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.</p><p>Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren&#39;t any major hiccups. Many investors cheered this news. But this doesn&#39;t solve Tesla&#39;s major issue at the moment: maintaining demand for its vehicles while pricing them profitably.</p><p><img src=\"https://static.tigerbbs.com/8ca407cedfe5c9a8b0642650f463e17a\" tg-width=\"720\" tg-height=\"449\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>TSLA Net Income (TTM) data by YCharts.</p><h2>All signs point to margin compression</h2><p>Restricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.</p><p>Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.</p><p>On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla&#39;s profit margins are likely headed much lower. You can already see it in the company&#39;s gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.</p><p>Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.</p><h2>The stock is wildly overvalued</h2><p>Tesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla&#39;s revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.</p><p>If Tesla&#39;s net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.</p><p>At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla&#39;s stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.</p><p>Unless Musk can pull another rabbit out of his hat, Tesla&#39;s stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-02 19:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2308403758","content_text":"Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.Tesla is projecting its EV production will grow yet again in 2023. But that doesn't mean the stock is a buy. Here's what Tesla bulls are missing that could tank the stock in 2023.Q4: No big surprisesTesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.For all of 2022, Tesla's net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren't any major hiccups. Many investors cheered this news. But this doesn't solve Tesla's major issue at the moment: maintaining demand for its vehicles while pricing them profitably.TSLA Net Income (TTM) data by YCharts.All signs point to margin compressionRestricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla's profit margins are likely headed much lower. You can already see it in the company's gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.The stock is wildly overvaluedTesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla's revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.If Tesla's net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla's stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.Unless Musk can pull another rabbit out of his hat, Tesla's stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":105711418,"gmtCreate":1675385341650,"gmtModify":1675385354534,"authorId":4098943201642940,"author":{"id":4098943201642940,"idStr":"4098943201642940","authorId":4098943201642940,"name":"AlfonsoDex","avatar":"https://community-static.tradeup.com/news/3c3dacba85c0b4dfd791bb1be953f1ec","vip":1,"currentWearingBadge":{"badgeId":"972123088c9646f7b6091ae0662215be-3","templateUuid":"972123088c9646f7b6091ae0662215be","name":"Legendary Trader","description":"Total number of securities or futures transactions reached 300","bigImgUrl":"https://static.tigerbbs.com/656db16598a0b8f21429e10d6c1cb033","smallImgUrl":"https://static.tigerbbs.com/03f10910d4dd9234f9b5702a3342193a","grayImgUrl":"https://static.tigerbbs.com/0c767e35268feb729d50d3fa9a386c5a","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2023.12.05","exceedPercentage":"93.35%","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1100},"crmLevel":6,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955860138,"type":1,"supId":0,"prevId":0,"content":"<u>ok</u>","text":"<u>ok</u>","html":"<u>ok</u>"}],"langContent":"EN"},{"id":9955887840,"gmtCreate":1675337668580,"gmtModify":1676538994269,"author":{"id":"4106699629777400","authorId":"4106699629777400","name":"Karen333","avatar":"https://community-static.tradeup.com/news/5a24d4a63169cc05795b5cf99d8bb3bc","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"4106699629777400","authorIdStr":"4106699629777400"},"htmlText":"I keep seeing these very well articulated articles talking about the negativities Of Tesla. As Isaid in my various comments throughout the past few months, Tesla has an extraordinary market position, competitive position and operates in one of the largest growth industries of our time. The risk is in management and execution. It is a solid buy and will be the stock of the decade.&nbsp;","listText":"I keep seeing these very well articulated articles talking about the negativities Of Tesla. As Isaid in my various comments throughout the past few months, Tesla has an extraordinary market position, competitive position and operates in one of the largest growth industries of our time. The risk is in management and execution. It is a solid buy and will be the stock of the decade.&nbsp;","text":"I keep seeing these very well articulated articles talking about the negativities Of Tesla. As Isaid in my various comments throughout the past few months, Tesla has an extraordinary market position, competitive position and operates in one of the largest growth industries of our time. The risk is in management and execution. It is a solid buy and will be the stock of the decade.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":8,"commentSize":6,"repostSize":0,"link":"https://ttm.financial/post/9955887840","repostId":2308403758,"repostType":2,"repost":{"id":"2308403758","kind":"highlight","pubTimestamp":1675337124,"share":"https://ttm.financial/m/news/2308403758?lang=&edition=fundamental","pubTime":"2023-02-02 19:25","market":"us","language":"en","title":"1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2308403758","media":"Motley Fool","summary":"A focus on production growth misses the big picture.","content":"<html><head></head><body><p>Electric vehicle (EV) pioneer <a href=\"https://laohu8.com/S/TSLA\">Tesla</a> had a rough 2022. After it grew into one of the world&#39;s largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.</p><p>Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.</p><p>Tesla is projecting its EV production will grow yet again in 2023. But that doesn&#39;t mean the stock is a buy. Here&#39;s what Tesla bulls are missing that could tank the stock in 2023.</p><h2>Q4: No big surprises</h2><p>Tesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.</p><p>For all of 2022, Tesla&#39;s net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.</p><p>Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren&#39;t any major hiccups. Many investors cheered this news. But this doesn&#39;t solve Tesla&#39;s major issue at the moment: maintaining demand for its vehicles while pricing them profitably.</p><p><img src=\"https://static.tigerbbs.com/8ca407cedfe5c9a8b0642650f463e17a\" tg-width=\"720\" tg-height=\"449\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>TSLA Net Income (TTM) data by YCharts.</p><h2>All signs point to margin compression</h2><p>Restricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.</p><p>Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.</p><p>On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla&#39;s profit margins are likely headed much lower. You can already see it in the company&#39;s gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.</p><p>Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.</p><h2>The stock is wildly overvalued</h2><p>Tesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla&#39;s revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.</p><p>If Tesla&#39;s net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.</p><p>At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla&#39;s stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.</p><p>Unless Musk can pull another rabbit out of his hat, Tesla&#39;s stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-02 19:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2308403758","content_text":"Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.Tesla is projecting its EV production will grow yet again in 2023. But that doesn't mean the stock is a buy. Here's what Tesla bulls are missing that could tank the stock in 2023.Q4: No big surprisesTesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.For all of 2022, Tesla's net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren't any major hiccups. Many investors cheered this news. But this doesn't solve Tesla's major issue at the moment: maintaining demand for its vehicles while pricing them profitably.TSLA Net Income (TTM) data by YCharts.All signs point to margin compressionRestricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla's profit margins are likely headed much lower. You can already see it in the company's gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.The stock is wildly overvaluedTesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla's revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.If Tesla's net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla's stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.Unless Musk can pull another rabbit out of his hat, Tesla's stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":105706544,"gmtCreate":1675338259242,"gmtModify":1675338281338,"authorId":3575764061064234,"author":{"id":3575764061064234,"idStr":"3575764061064234","authorId":3575764061064234,"name":"TKCat","avatar":"https://static.tigerbbs.com/99ee288f493a95ddc49f6f7bbeb74457","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955887840,"type":1,"supId":0,"prevId":0,"content":"<u>ok</u>","text":"<u>ok</u>","html":"<u>ok</u>"},{"id":105706541,"gmtCreate":1675338227856,"gmtModify":1675338238054,"authorId":4090604123983960,"author":{"id":4090604123983960,"idStr":"4090604123983960","authorId":4090604123983960,"name":"LGC1956","avatar":"https://static.tigerbbs.com/f570ce1c12547d71ff26c7c58b71f569","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955887840,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">Ok</span>","text":"<span class=\"s1\">Ok</span>","html":"<span class=\"s1\">Ok</span>"},{"id":105706534,"gmtCreate":1675338189139,"gmtModify":1675338203001,"authorId":3584090913879250,"author":{"id":3584090913879250,"idStr":"3584090913879250","authorId":3584090913879250,"name":"Todkie","avatar":"https://static.tigerbbs.com/68110d1283e1fd53c9c0fe6ec6bccb7e","vip":1,"currentWearingBadge":{"badgeId":"972123088c9646f7b6091ae0662215be-3","templateUuid":"972123088c9646f7b6091ae0662215be","name":"Legendary Trader","description":"Total number of securities or futures transactions reached 300","bigImgUrl":"https://static.tigerbbs.com/656db16598a0b8f21429e10d6c1cb033","smallImgUrl":"https://static.tigerbbs.com/03f10910d4dd9234f9b5702a3342193a","grayImgUrl":"https://static.tigerbbs.com/0c767e35268feb729d50d3fa9a386c5a","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2022.09.03","exceedPercentage":"93.61%","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1100},"crmLevel":8,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955887840,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">Ok</span>","text":"<span class=\"s1\">Ok</span>","html":"<span class=\"s1\">Ok</span>"},{"id":105706533,"gmtCreate":1675338187511,"gmtModify":1675338200092,"authorId":4096521277869650,"author":{"id":4096521277869650,"idStr":"4096521277869650","authorId":4096521277869650,"name":"kk14","avatar":"https://static.tigerbbs.com/4b165b71f08fd60cef55143f7bc29fc7","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955887840,"type":1,"supId":0,"prevId":0,"content":"<u>q</u>","text":"<u>q</u>","html":"<u>q</u>"},{"id":105706532,"gmtCreate":1675338185935,"gmtModify":1675338199057,"authorId":3584469948955778,"author":{"id":3584469948955778,"idStr":"3584469948955778","authorId":3584469948955778,"name":"Howieeeee","avatar":"https://static.tigerbbs.com/1f51b6124021500180f9677882316952","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9955887840,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">Yeah</span>","text":"<span class=\"s1\">Yeah</span>","html":"<span class=\"s1\">Yeah</span>"}],"langContent":"EN"},{"id":9955887926,"gmtCreate":1675337562766,"gmtModify":1676538994261,"author":{"id":"3576140222331577","authorId":"3576140222331577","name":"Guavaxf30","avatar":"https://static.tigerbbs.com/1ff15ff6aa254c9130f9af922f7e2447","vip":1,"crmLevel":9,"crmLevelSwitch":1,"idStr":"3576140222331577","authorIdStr":"3576140222331577"},"htmlText":"That's what I have been seeing too. But it won't tank so fast.&nbsp; Presently, the market is still on FOMO&nbsp;herd mentality.","listText":"That's what I have been seeing too. But it won't tank so fast.&nbsp; Presently, the market is still on FOMO&nbsp;herd mentality.","text":"That's what I have been seeing too. But it won't tank so fast. Presently, the market is still on FOMO herd mentality.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9955887926","repostId":2308403758,"repostType":2,"repost":{"id":"2308403758","kind":"highlight","pubTimestamp":1675337124,"share":"https://ttm.financial/m/news/2308403758?lang=&edition=fundamental","pubTime":"2023-02-02 19:25","market":"us","language":"en","title":"1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2308403758","media":"Motley Fool","summary":"A focus on production growth misses the big picture.","content":"<html><head></head><body><p>Electric vehicle (EV) pioneer <a href=\"https://laohu8.com/S/TSLA\">Tesla</a> had a rough 2022. After it grew into one of the world&#39;s largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.</p><p>Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.</p><p>Tesla is projecting its EV production will grow yet again in 2023. But that doesn&#39;t mean the stock is a buy. Here&#39;s what Tesla bulls are missing that could tank the stock in 2023.</p><h2>Q4: No big surprises</h2><p>Tesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.</p><p>For all of 2022, Tesla&#39;s net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.</p><p>Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren&#39;t any major hiccups. Many investors cheered this news. But this doesn&#39;t solve Tesla&#39;s major issue at the moment: maintaining demand for its vehicles while pricing them profitably.</p><p><img src=\"https://static.tigerbbs.com/8ca407cedfe5c9a8b0642650f463e17a\" tg-width=\"720\" tg-height=\"449\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>TSLA Net Income (TTM) data by YCharts.</p><h2>All signs point to margin compression</h2><p>Restricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.</p><p>Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.</p><p>On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla&#39;s profit margins are likely headed much lower. You can already see it in the company&#39;s gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.</p><p>Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.</p><h2>The stock is wildly overvalued</h2><p>Tesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla&#39;s revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.</p><p>If Tesla&#39;s net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.</p><p>At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla&#39;s stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.</p><p>Unless Musk can pull another rabbit out of his hat, Tesla&#39;s stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n1 Thing Tesla Bulls Get Wrong, and Why It Might Tank the Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-02 19:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2023/02/01/1-thing-tesla-bulls-get-wrong-and-why-it-might-tan/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2308403758","content_text":"Electric vehicle (EV) pioneer Tesla had a rough 2022. After it grew into one of the world's largest companies in 2021 with a market cap of over $1 trillion, its value fell by more than 50% last year. But the downtrend in the stock has started to reverse rapidly in the first month of 2023. After Tesla reported solid fourth-quarter earnings on Jan. 25 and offered an optimistic outlook, its stock popped more than 20% over the next two trading days.Shares are now up by about 40% year to date, and the automaker is back to a market cap of more than $500 billion.Tesla is projecting its EV production will grow yet again in 2023. But that doesn't mean the stock is a buy. Here's what Tesla bulls are missing that could tank the stock in 2023.Q4: No big surprisesTesla reported solid if unsurprising Q4 results. Revenue came in at $24.3 billion, up 37% year over year. Net income grew at an even larger 59% to $3.7 billion. The company has rapidly scaled its manufacturing over the past few years and started putting up impressive profit margins for an automaker.For all of 2022, Tesla's net income was $12.6 billion on $81.5 billion in revenue, giving it a net income margin of 15.4%. This is much higher than its automotive peers, a key reason why investors have bid up the stock. Tesla has achieved these strong margins by spending less on research and development than its competitors do, and by charging premium prices for most of its vehicles.Tesla is forecasting that it will manufacture 1.8 million vehicles in 2023, up from 1.37 million in 2022, but CEO Elon Musk said on the Q4 conference call with analysts that production could reach 2 million if there aren't any major hiccups. Many investors cheered this news. But this doesn't solve Tesla's major issue at the moment: maintaining demand for its vehicles while pricing them profitably.TSLA Net Income (TTM) data by YCharts.All signs point to margin compressionRestricted supply across the automotive market in 2021 and early 2022 enabled Tesla to raise its prices significantly, which led to margin expansion. The company also benefited from older contracts on commodity inputs like lithium, nickel, and cobalt, which allowed it to buy them at lower prices.Now, all these factors that powered rapid margin expansion are starting to unravel. Since the August peak, the price of a used Tesla has started to plummet and currently sits at around $51,000. This, in turn, has hurt demand for new Tesla vehicles at higher prices, and the company lowered the cost of cars across its fleet by 5% to 20% in early January to spur demand. The company is also dealing with soaring input prices, with commodities like lithium up significantly in the last few years. Tesla just signed a new lithium contract, which includes market-based pricing, that should start showing up on its income statement within the next few quarters, and not in a good way.On top of decreasing selling prices and rising commodity costs, Tesla is likely getting squeezed by growth in average hourly wages across the U.S. Add up all these factors and Tesla's profit margins are likely headed much lower. You can already see it in the company's gross margin, which fell to 25.9% in Q4 compared to its peak of 32.9% in Q1 2022. This will only continue after its latest price cuts. If gross margins decline closer to 20%, it will be almost impossible for the company to maintain a 15% net income margin.Profit margins are much more important than production growth. If Tesla continues on this margin compression path, its earnings will be much lower in 2023 than they were in 2022.The stock is wildly overvaluedTesla is guiding for production of 1.8 million vehicles in 2023, up about 30% from 2022. It is unlikely that the company will be able to raise prices on new vehicles because of declining used car prices -- lower used car prices almost always force a manufacturer to lower new car prices -- and new price cuts from competitors. With selling prices 10% to 20% lower, this production growth could still lead to Tesla's revenue going from $80 billion last year to $100 billion this year. Good news, right? Well, not exactly.If Tesla's net margin declines to around 10% in 2023 -- and all signs point to that being likely, given lower car prices and higher input costs -- that would give it $10 billion in earnings on $100 billion in annual revenue, which would be lower than the $12.6 billion in earnings it generated in 2022.At a market cap of $550 billion (roughly where the stock is now), $10 billion in net income would give Tesla's stock a price-to-earnings ratio of 55 -- almost triple the current market average. Declining earnings and a price-to-earnings ratio of 55 look like a recipe for disastrous stock returns, especially for more mature businesses like Tesla. The average automotive company trades at a P/E ratio below 10. If Tesla fails to grow its earnings at a high rate as it has in the past, there is major downside for shareholders as the stock will likely start trading in line with competitors.Unless Musk can pull another rabbit out of his hat, Tesla's stock looks to be in a precarious spot right now, regardless of how fast its production grows in 2023.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":52,"commentSize":9,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2308403758"}