The market awaited the Tesla, Inc. (NASDAQ:TSLA) Q4 2024 print yesterday, eager to understand how the company’s weakening EV delivery and sales numbers would impact the company’s overall finances.
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Reflecting these slowing figures, Tesla ended up missing both top- and bottom-line projections. Revenues of $25.71 billion fell $1.42 billion short of analyst expectations, while its EPS of $0.73 was off by $0.04.
And yet, Tesla shares did not falter, even rising in after hours trading. The faith of the market in CEO Elon Musk and his optimistic projections on AI, robotaxis, and the launch of cheaper EV models was enough to sooth the doubts of many investors.
However, the investor Eugenio Catone is not among them.
“Its fundamentals do not justify its high price multiples, and future growth remains uncertain,” explains the 5-star investor.
While Catone is receptive to Tesla’s ambitions extending beyond its role as an EV company, he prefers to let the numbers speak for themselves.
“Investments in autonomous driving and AI are the main pivot for those who have a bullish thesis about this company, but for the umpteenth time they have not played a major role in economic terms,” continues the investor.
Catone is looking for growth to justify Tesla’s triple-digit P/E ratio, and he does not see it. While the investor acknowledges that energy generation and storage revenues are rising, these segments still play a relatively small role (21%) in the company’s overall revenues.
The investor readily admits that Tesla could very well realize Musk’s autonomous driving vision. But with such an inflated valuation multiple, Catone notes there is miniscule margin for error.
“How can Tesla be considered a growth company if it is not growing?,” asks Catone. The investor is therefore rating TSLA a Strong Sell. (To watch Catone’s track record, click here)
Wall Street, on the other hand, is a mix of bulls, bears, and those in between. With 12 Buy, 10 Hold, and 8 Sell ratings, TSLA holds a Hold (i.e. Neutral) consensus rating. Its 12-month average price target of $332.59 implies losses of ~-15% in the coming year. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
