Tesla Earnings Preview: Can a New Narrative Overcome Weak Fundamentals?
$Tesla (TSLA.US)$ will kick off the Mag 7 earnings season with its Q1 2025 results after the market closes on Tuesday, April 22, drawing intense scrutiny from Wall Street. As a bellwether for tech sentiment, Tesla’s post-earnings performance could set the tone for the sector.
Analysts forecast Q1 revenue of $21.54 billion, up 1.12% year-over-year, and adjusted EPS of $0.37, up 8.24%. However, expectations have soured in recent weeks, with Bloomberg data showing a 5% cut to revenue estimates and an 8% slash to profit forecasts, reflecting concerns over weakening fundamentals.
Tesla’s stock has plummeted over 50% from its December peak, weighed down by slumping auto sales, Elon Musk’s political distractions, and looming tariff-related supply chain risks. At a trailing P/E of 118—well above the 20-35 range for most megacap peers—valuations remain stretched, sitting in the 92nd percentile over three years.
Auto Business: Tariffs and Margins in Focus
Investors will zero in on how tariffs impact Tesla’s auto segment, particularly its reliance on Chinese battery imports for vehicles and energy storage. Key questions: Will $Tesla (TSLA.US)$ raise prices to offset higher costs, squeezing demand, or absorb the hit, eroding margins?
Q1 vehicle deliveries slumped 13% to 336,700 units, marking Tesla’s first double-digit decline and the lowest quarterly volume in three years. Weakness spanned major markets—China, the U.S., and Europe. Temporary production halts for a Model Y refresh and backlash against Musk’s political activities likely dented brand appeal and demand.
JPMorgan, maintaining an “underweight” rating and a $120 price target (the Street’s lowest), slashed profit forecasts after “disappointingly weak” deliveries.
Mizuho, cutting its target to $375, warns tariffs could further inflate prices and suppress demand, potentially shaving 3.5% off 2025 U.S. revenue.
UBS, with a $190 target, sees a 25% auto tariff and upcoming 25% parts import tax adding $5,000 per vehicle, potentially reducing U.S. demand by 9% and signaling a “new era” for the auto industry.
Energy Storage: A Bright Spot
Tesla’s energy storage business, including Megapack and Powerwall, is poised to shine. Q1 energy installations surged 156.6% to 10.4 GWh, a record high, driving over 200% revenue growth.
With a 25.2% margin in Q4 (vs. 16.6% for autos), the segment’s robust demand and Shanghai’s new 40 GWh Megapack factory position it as a key growth driver, offsetting auto weakness.
AI and Autonomy: The Long Game
Elon Musk is doubling down on Tesla’s AI pivot, betting on autonomous robotaxis and Optimus humanoid robots.
Investors will seek updates on robotaxi testing (slated for Austin in June and California later this year), unsupervised Full Self-Driving (FSD) timelines, and Optimus production (targeting 5,000 units in 2025). Clarity on these initiatives could bolster Tesla’s narrative as an AI leader, even amid near-term challenges.
Post-Earnings Outlook
Tesla’s track record is shaky: in the past eight quarters, it missed adjusted EPS six times, revenue six times, and saw stock swings exceed expectations in seven.
Options markets imply a ±10.96% move post-earnings, slightly below the prior four-quarter average of ±12.3%. Skewed option volatility signals bearish sentiment, yet Barclays suggests a compelling narrative could trump weak fundamentals, creating upside potential.
The Big Picture
While Tesla’s energy business and AI ambitions offer hope, its core EV segment faces headwinds from tariffs, fierce competition, and brand erosion tied to Musk’s controversies.
Investors must weigh whether Tesla’s growth story can outweigh near-term pressures on sales, margins, and sentiment. UBS projects an 11% drop in 2025 vehicle deliveries, underscoring the challenges ahead.
Tesla’s Q1 report is a high-stakes moment. Will its energy and AI bets spark optimism, or will auto struggles and tariff fears dominate?
Mooers, share your take: Are you bullish or bearish on Tesla’s earnings?
Sources: Nasdaq, Investing, Morningstar, Business Insider
by moomoo News Olivia
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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aenfinity 73591149 : Why?
XHungManX : theres no hope for Tesla!!!! overpriced
71781791 : a lot of shorts about to get melted next week
Yield-Trapped : Liberals' dislike for Elon Musk often stems from a mix of ideological clashes and his public actions. His push for deregulation, criticism of progressive policies, and acquisition of X, which some see as amplifying right-leaning voices, rub many the wrong way. His self-driving car promises and labor practices at Tesla have drawn scrutiny, with accusations of cutting corners or exploiting workers. Some view his wealth and influence as emblematic of unchecked capitalism, clashing with liberal values on economic equity. His trolling or provocative posts—like calling himself a "free speech absolutist" or mocking pronouns—also alienate those who prioritize social justice.
On the flip side, Musk’s defenders argue he’s a visionary challenging establishment norms, from electric vehicles to space travel. They say his critics cherry-pick flaws to fit a narrative, ignoring his contributions to climate tech or free discourse. The truth likely lies in a mix of genuine policy disagreements and cultural resentment toward his unfiltered, contrarian style. If you want me to dig into specific X posts or web sources for real-time sentiment, let me know.
SpacemanSter : let it sink.
102661548 : Tesla's valuation is extremely high; without exceptional performance, how can its stock price be supported?
Lee Ah Lee : Electric vehicles and gasoline vehicles, several hours and several minutes.
R Dragon (6龍交易手) : https://www.moomoo.com/hans/community/feed/114360449892358?global_content=%7B%22invite%22%3A%22103048478%22%2C%22promote_content%22%3A%22mm%3Afeed%3A114360449892358%22%7D
74946489 : Not looking good for Tesla. On the other hand, people clearly buy Tesla stock because they are Musk fans rather than because the business is doing well. So who knows? Maybe it will bounce to 300. Maybe it will drop to 100. The market isn't rational with Tesla.
Yield-Trapped : I'm buying before the robots (Optimus) go commercial! Love those things!
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