Tesla (TSLA) AI Stock Analysis

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Tesla

(NASDAQ:TSLA)

73Outperform

Tesla's strong financial performance and ambitious future growth plans are balanced by high valuation concerns and technical indicators suggesting caution. Despite challenges in margins and regulatory hurdles, Tesla's innovative advancements present significant long-term potential.

Positive Factors

AI technology

Advanced AI technology is expected to revolutionize manufacturing by enabling machines to produce labor with minimal human intervention.

Demand for new models

Demand for the new Model Y appears to be strong, with positive indicators from South Korea and China.

New product launches

Potential positive catalysts for Tesla include the launch of next-gen vehicles and Cybercab production.

Negative Factors

Brand perception

Tesla has become a political symbol globally, causing a brand crisis that is harming its future prospects.

Market competition

Tesla has lost its #1 BEV leadership position to BYD, highlighting increased competition in the market.

Production and delivery challenges

Weak deliveries and worse than expected production results have been reported, impacting Tesla's performance.

Tesla (TSLA) vs. S&P 500 (SPY)

Market Cap

$811.56B

Dividend YieldN/A

Average Volume (3M)142.54M

Price to Earnings (P/E)123.8

Beta (1Y)1.88

Revenue Growth0.95%

EPS Growth-52.81%

CountryUS

Employees125,665

SectorConsumer Cyclical

Sector Strength64

IndustryAuto - Manufacturers

Share Statistics

EPS (TTM)2.04

Shares Outstanding3,216,517,000

10 Day Avg. Volume169,403,100

30 Day Avg. Volume142,539,565

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)8.19

Price to Cash Flow (P/CF)41.50

P/FCF Ratio89.80

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$305.93

Price Target Upside21.25% Upside

Rating ConsensusHold

Number of Analyst Covering38

Tesla Business Overview & Revenue Model

Company DescriptionTesla, Inc. (TSLA) is a leading American electric vehicle and clean energy company headquartered in Palo Alto, California. Founded in 2003, Tesla specializes in the design, manufacturing, and sale of electric vehicles and energy storage products. The company's core automotive offerings include the Model S, Model 3, Model X, and Model Y, along with the Cybertruck and Tesla Semi, which are in development. Beyond vehicles, Tesla also produces energy solutions, such as the Powerwall, Powerpack, and Solar Roof, to provide sustainable energy options for homes and businesses.

How the Company Makes MoneyTesla generates revenue primarily through the sale of electric vehicles. The bulk of its revenue comes from the production and sale of its various car models, including the Model S, Model 3, Model X, and Model Y. In addition to automotive sales, Tesla also earns money from its energy generation and storage segment, which includes the sale of energy products like the Powerwall, Powerpack, and Solar Roof. Another significant revenue stream comes from regulatory credits, which Tesla earns by selling credits to other automakers who need them to comply with environmental regulations. Tesla also offers services and other revenues, including vehicle maintenance, insurance products, and sales of used vehicles. Partnerships with suppliers and advancements in its autonomous driving technology also contribute to Tesla's earnings, along with its Supercharger network, which provides charging services to Tesla owners.

Tesla Financial Statement Overview

Summary

Tesla demonstrates solid financial health with strong revenue growth and profitability margins. The balance sheet is strong with low leverage and good equity capitalization. While cash flows are generally positive, the decline in free cash flow warrants attention. Overall, Tesla maintains a strong financial position with a positive growth trajectory, though operational efficiency and cash flow trends should be monitored.

Income Statement

Very Positive

Tesla has shown consistent revenue growth, with a 20% increase from 2022 to 2023. The gross profit margin is strong at 17.9%, and the net profit margin is also impressive at 7.3%. However, the decline in EBIT and EBITDA margins from 9.2% and 15.3% in 2023 to 7.2% and 11.8% in 2024 respectively suggests some pressure on operational efficiency.

Balance Sheet

Very Positive

The balance sheet is robust with a low debt-to-equity ratio of 0.11, indicating low leverage. The equity ratio is healthy at 59.7%, showing strong capitalization. Return on equity is commendable at 9.7%, reflecting effective use of equity capital.

Cash Flow

Positive

Tesla's operating cash flow to net income ratio stands at 2.1, highlighting strong cash generation relative to net income. However, free cash flow decreased by 16.3% from 2023 to 2024, which could signal challenges in maintaining free cash flow growth.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
97.69B	96.77B	81.46B	53.82B	31.54B
	Gross Profit
17.45B	17.66B	20.85B	13.61B	6.63B
	EBIT
7.08B	8.89B	13.66B	6.52B	1.99B
	EBITDA
14.71B	14.80B	17.66B	9.63B	4.22B
	Net Income Common Stockholders
7.13B	15.00B	12.58B	5.52B	721.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
36.56B	29.09B	22.18B	17.71B	19.38B
	Total Assets
122.07B	106.62B	82.34B	62.13B	52.15B
	Total Debt
13.62B	9.57B	5.75B	8.87B	13.28B
	Net Debt
-2.52B	-6.83B	-10.51B	-8.70B	-6.11B
	Total Liabilities
48.39B	43.01B	36.44B	30.55B	28.47B
	Stockholders Equity
72.91B	62.63B	44.70B	30.19B	22.23B
Cash Flow		Free Cash Flow
3.58B	4.36B	7.55B	3.48B	2.70B
	Operating Cash Flow
14.92B	13.26B	14.72B	11.50B	5.94B
	Investing Cash Flow
-18.79B	-15.58B	-11.97B	-7.87B	-3.13B
	Financing Cash Flow
3.85B	2.59B	-3.53B	-5.20B	9.97B

Tesla Technical Analysis

Technical Analysis Sentiment

Negative

Last Price252.31

Price Trends

50DMA

291.80

Negative

100DMA

344.16

Negative

200DMA

290.32

Negative

Market Momentum

MACD

-11.69

Negative

RSI

47.30

Neutral

STOCH

56.43

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSLA, the sentiment is Negative. The current price of 252.31 is below the 20-day moving average (MA) of 255.43, below the 50-day MA of 291.80, and below the 200-day MA of 290.32, indicating a bearish trend. The MACD of -11.69 indicates Negative momentum. The RSI at 47.30 is Neutral, neither overbought nor oversold. The STOCH value of 56.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSLA.

Tesla Risk Analysis

Tesla disclosed 40 risk factors in its most recent earnings report. Tesla reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Tesla Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HMC	74 Outperform	$45.31B	6.18	8.11%	4.38%	4.37%	6.93%
TSLA	73 Outperform	$811.56B	123.78	10.52%	―	0.95%	-52.81%
LI	73 Outperform	$23.30B	22.14	12.29%	―	15.50%	-32.48%
F	72 Outperform	$37.10B	6.38	13.42%	8.04%	5.00%	35.92%
GM	72 Outperform	$43.41B	6.85	9.44%	1.10%	9.08%	-15.25%
TM	70 Outperform	$231.78B	6.63	14.59%	2.87%	-0.59%	7.56%
Sector *	59 Neutral	$11.48B	10.33	-0.84%	4.02%	1.25%	-16.06%

* Consumer Cyclical Sector Average

Performance Comparison

TSLA

Tesla

252.31

90.83

56.25%

Ford Motor

9.33

-2.04

-17.94%

General Motors

43.63

1.36

3.22%

HMC

Honda Motor Company

27.62

-6.84

-19.85%

Toyota Motor

169.42

-72.25

-29.90%

Li Auto

23.23

-5.37

-18.78%

Tesla Earnings Call Summary

Earnings Call Date: Jan 29, 2025 | % Change Since: -35.16% | Next Earnings Date: Apr 22, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of strong performance in vehicle deliveries and energy storage deployment, alongside challenges in margins and production due to new model transitions and regulatory uncertainties. The advancements in Full Self Driving and energy storage indicate significant growth potential, but these are tempered by short-term production and regulatory hurdles.

Highlights

Record Vehicle Deliveries

Tesla delivered vehicles at an annualized rate of nearly 2 million a year, setting a new record for production and deliveries.

Best-Selling Vehicle

Model Y was the best-selling vehicle of any kind globally in 2024.

Energy Storage Deployment Growth

Energy storage deployments reached an all-time high in Q4 with a new record for deliveries in the Greater China market.

Cost Reductions Achieved

Overall cost per car was reduced to below $35,000, primarily through material cost reductions.

Free Cash Flow

Tesla generated free cash flow of $3.6 billion for the year despite increased CapEx.

Expansion of Battery Production

Tesla's second factory is operational in Shanghai, and a third factory is under construction to ramp up stationary battery storage production.

Lowlights

Automotive Margin Decline

Quarter-over-quarter decline in automotive margin due to lower ASPs and FSD-related revenue recognition.

Production Challenges

Introduction of the new Model Y across all factories will result in several weeks of lost production, impacting margins due to idle capacity.

Regulatory and Tariff Concerns

Uncertainty around tariffs and reliance on a global supply chain may impact business and profitability.

Hardware 3 Upgrade Costs

Tesla will need to upgrade Hardware 3 vehicles for those who have purchased Full Self Driving, posing potential CapEx challenges.

Company Guidance

In the Tesla Fourth Quarter 2024 earnings call, CEO Elon Musk highlighted significant achievements and ambitious future goals. Tesla delivered vehicles at an annualized rate of nearly 2 million, with the Model Y being the best-selling vehicle globally. Musk emphasized the exponential focus on autonomy, projecting Tesla's potential to become the world's most valuable company. The company is set to launch unsupervised Full Self Driving (FSD) as a paid service in Austin by June 2025, and Musk foresees the capability expanding nationwide by the end of the year. Tesla's Q4 Vehicle Safety Report showed significant year-over-year safety improvements with FSD, and the company continues to invest heavily in AI infrastructure, including a new Cortex training cluster at Gigafactory Austin. Musk projected that Optimus humanoid robots could generate over $10 trillion in revenue long-term, with plans to build several thousand units in 2025. Tesla also set records in energy storage deployments and vehicle deliveries, despite a challenging macro environment, and plans to introduce several new models, including a more affordable vehicle, in 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.