Last night, after Tesla released its financial report, the stock price plummeted by 9.74%. Could this be the signal of a new round of plunge?
Looking back, Tesla $Tesla Motors(TSLA)$ 's previous surge was driven by a skyrocketing valuation due to the rebound in sales. At the beginning of the year, Tesla's price-to-earnings ratio (P/E) dropped to below 30PE:
As of yesterday, Tesla's P/E ratio remains as high as 74 times.
Regarding sales, the delivery volume in the first half of the year increased by 57% compared to the previous year, and the strategy of price reduction and promotion played a role. But the downside is that the gross profit margin continued to decline in the second quarter, reaching only 18.19%.
According to Musk, Tesla is more focused on sales volume rather than profit margin.
Although the gross profit margin declined in Q2, thanks to excellent cost control, Tesla's net profit margin remained stable compared to the previous quarter:
Overall, the performance is not so bad. The key reason for the strong stock price reaction is that the growth rate of the performance cannot keep up with the increase in valuation.
From Tesla's business perspective, its main business is automobiles, and its subsidiary businesses include photovoltaics and energy storage. The robotics business is still in its early stages and takes a long time to be profitable.
In terms of profitability prospects, although the revenue of the photovoltaic and storage business is growing rapidly, the gross profit margin is surprisingly low. Considering China's advantages in the photovoltaic industry chain and the less impressive commercial model of photovoltaics compared to smart cars, it is expected that this business will have a hard time boosting Tesla:
Therefore, the key to Tesla's survival lies in its automobiles business. Considering the current fierce market competition, it is not ruled out that Tesla may continue to reduce prices to promote sales. With the existing capacity and the global automobile market in a competitive state, Tesla's future growth rate cannot match the current valuation.
Currently, analysts predict that Tesla's revenue growth rate for 2023 will be 22.89%, and the estimated net profit will be $11.5 billion, a decrease of 9% compared to the previous year. This is mainly due to Tesla's profitability being significantly affected by the price war compared to 2022.
Under such circumstances, either the price war eases, or Tesla's sales growth far exceeds market expectations; otherwise, how can the current valuation be sustained?
Therefore, when there is a gap between reality and ideals, Tesla may be headed for another nosedive!
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