Tesla Shares Rise After-Hours as Musk Says He'll Spend Less Time With DOGE
$Tesla (TSLA.US)$ shares rose in extended trading Tuesday after CEO Elon Musk said he will spend less time running the Department of Government Efficiency and more time with the company, assuaging investors and analysts who worried he was losing focus on the electric vehicle maker.
Shares rose 5.2% as Musk's reassurance outweighed the earnings and revenue miss posted by the company for the first quarter and the challenges that it said came with Trump trade policies.
Before the financial results were released, Tesla shares closed 4.5% Tuesday, recouping some of the losses the previous day when perennial bull Daniel Ives, an analyst at Wedbush and his colleague Sam Brandeis reportedly warned that the company faces a “code red situation,” unless Musk leaves his leadership role at DOGE and go back to leading his electric vehicle company full time.
The warning came from the analysts who continued to rate Tesla as “outperform” even as they noted that Musk’s role at DOGE has damaged his company’s brand.
"I think starting probably next month, May, my time allocation to DOGE will drop significantly," Musk told analysts during the company's earnings call. Still, he expects to continue to be involved with the department for the rest of President Donald Trump's term.
The assurance came after the company reported that adjusted earnings declined to 27 cents in the first quarter, from 45 cents a year earlier. That's lower than the 43 cents expected by analysts, according to Bloomberg consensus. Revenue dropped 9.2% to $19.34 billion, below expectations that called for $21.37 billion.
The company said it will revisit its guidance in its second quarter update, noting that "the rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment."
While Tesla CEO Elon Musk has been closely linked to the Trump administration, taking a leadership role at the Department of Government Efficiency, known as DOGE, that hasn't spared the electric vehicle maker from the challenges that came as a result of the sweeping tariffs imposed by US government.
"It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services," the company said, even as it noted how it has been "making prudent investments that will set up both our vehicle and energy businesses for growth."
In early April, the company reported first quarter deliveries fell to 336,681 vehicles, from 386,810 a year earlier. That was worse than the average analyst estimate of 383,632 vehicles for the three months that ended March, according to Bloomberg consensus.
"Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025," the company said. "Our purpose-built Robotaxi product – Cybercab – will continue to pursue a revolutionary “unboxed” manufacturing strategy and is scheduled for volume production starting in 2026."
Before the results were released, Morningstar analyst Seth Goldstein wrote in a note to clients Monday that the company needs to launch its new affordable vehicle in order to increase deliveries, adding that Tesla's current product lineup is "near full market saturation in the luxury auto segment.”
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Danyerrr : tesla is massively overvalued.
70775116 : keep dca in
mommymoney : pride before destruction
aspiring Bird_0369 Danyerrr : how do you value Tesla ? why do you think they are massively overvalued?
Danyerrr aspiring Bird_0369 : P/E of 112 (on prior earnings, even higher now), and a business thats crumbling by the day
aspiring Bird_0369 : i can maybe understand the PE, depending on your applied growth rate. however, the industry as a whole is cyclical and currently crumbling. their margins are better than any other US car company. if you value the growth rate as a car company, i can see the PE as rich. as a tech conglomerate, the growth rate is more aligned. i take it you dont believe in self-driving or robotics.
1000proof aspiring Bird_0369 : I can give you 15 reasons why they are over valued. 1)They have a poor build quality 2) They are expensive to maintain 3) Replacing the batteries is a hassle 4) Tesla cars have issues with autopilot features 5) Tesla cars lack a towing capacity 6) Rattling in the suspension 7) The power steer fails occasionally 8) Frequent wear of tires 9) Lacks car dealership support 10) Stereotypical customer service 11) Problem with Touch screen Cruise Control Adjustment 12) Buggy updates 13) Not good on snow 14) Cold Battery Degradation 15) Unreliable dashboard warning lights
aspiring Bird_0369 1000proof : well you gave me 15 reasons why their vehicles are overvalued, but you didnt give me any reason why the stock is overvalued.
Edit Name 88 1000proof : he thinks this is a car company lol!
74946489 aspiring Bird_0369 : What are you expecting for Tesla's growth rate that justifies its current valuation? Because, putting aside what industry it's in, it's currently a shrinking company.
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