Tesla's net income is down 22.6% YoY, down 31.5% QoQYesterday, after the closing bell, Tesla announced its earnings for the first quarter of 2023. The company reported a net income of 2.539$ billion and total revenue of 23.329$ billion. Net income saw a double-digit decline on a yearly and quarterly basis, while revenue declined only on a quarterly basis. In 1Q23, Tesla produced 440 808 vehicles and delivered 422 875 of them. During the same period, the company rapidly grew its energy storage production capacity at a mega-factory in Lathrop and announced a new mega-factory in Shanghai. In addition to that, Tesla cut its vehicle prices multiple times, intending to attract more buyers and get a competitive edge against its rivals. That proved a good strategy, with Model Y becoming the best-selling vehicle of any kind in Europe during 1Q23. The report also states that energy deployments increased by 360% YoY, and solar deployments rose by 40% YoY. In regard to the future outlook, Tesla plans to grow production as quickly as possible. In line with that, it plans to launch the production of Cybertrack at Gigafactory in Texas and reach a total production of vehicles of 1.8 million by the end of the year.
Net income = 2.539$ billion (-22.6% YoY, -31.5% QoQ)
Total revenue = 23.329$ billion (+24% YoY, -4% QoQ)
Total production = 440 808 (+44.3% YoY, +0.2% QoQ)
Total deliveries = 422 875 (+36.4% YoY, +4.3% QoQ)
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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Tesla - Recession poised to weigh on TSLA stock for longerThe next day after its earnings release for Q3 2022, shares of Tesla fell 6.65% by the closing bell. This move came despite record-breaking revenue being reported by the company, but one, which missed analysts' estimates. The company's report stated that the operating margin reached 17.2% and free cash flow exceeded 8.9 bn. U.S. dollars for the past 12 months.
In addition to that, the company said it would continue to focus on increasing production and development of its current projects. In the third quarter, Tesla produced over 365,000 vehicles and delivered over 343,000 of them, putting these figures substantially higher than those for previous quarters.
Overall, the earnings report was solid. But that does not change the fact a recession is underway, and the stock is down approximately 50% from its all-time-high value. While that looks like a bargain to the past, we do not think so. In our opinion, the increasing cost of electricity (or even its unavailability in some countries because of the energy crisis) will pose a short-term obstacle to selling more cars for Tesla in Europe.
Furthermore, with people's declining savings, we expect consumers' willingness to buy vehicles to fall dramatically in the next year. Indeed, we think this will pose another substantial challenge for the company in 2023. Because of that, we believe now is not the time to buy this stock; instead, we will stay on the sidelines and wait. Our views are based on a combination of fundamental and technical factors.
Illustration 1.01
The picture above shows the Tesla stock deep in the bear market territory, down approximately 50% from its all-time-high value.
Technical analysis - daily time frame
MACD is bearish but flattening. RSI and Stochastic are bearish. DM+ and DM- are bearish as well. Overall, the daily time frame is bearish.
Illustration 1.02
The image above displays the daily chart of Tesla stock. It also shows simple support/resistance levels. We will monitor the price and its ability to hold above/below the immediate support; if the price fails to hold above it, it will be bearish.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.