It has been about a month since the last earnings report for Tesla (TSLA). Shares have lost about 29.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Tesla due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Tesla reported fourth-quarter 2024 earnings per share of 73 cents, which missed the Zacks Consensus Estimate of 75 cents but increased from the year-ago figure of 71 cents. Total revenues of $25.71 billion also lagged the consensus mark of $27.5 billion but inched up from $25.17 billion recorded in the corresponding quarter of 2023.
Despite the significant miss, shares of Tesla were up more than 4% in after-hours trading. TSLA remains committed to starting the production of affordable vehicles in the first half of this year. It also reaffirmed that Cybercab will begin volume production in 2026. And most importantly, energy storage deployments are expected to grow at least 50% this year.
Tesla’s fourth-quarter production totaled 459,445 units (436,718 Model 3/Y and 22,727 other models), declining 7% year over year and missing our estimate of 540,826 units. The company delivered 495,570 vehicles, which increased 2% year over year but lagged our estimate of 517,043 units. The Model 3/Y registered deliveries of 471,930 vehicles, marking year-over-year growth of 2% but falling short of our expectations by 19,221 units.
Total automotive revenues of $19.78 billion were down 8% year over year and lagged our estimate of $22.56 billion. The reported figure also included $692 million from the sale of regulatory credits for electric vehicles, which increased 60% year over year. Automotive sales, excluding revenues from leasing and regulatory credits, totaled $18.66 million, which missed our projection of $21.56 million on lower-than-expected deliveries.
Automotive gross profit (including automotive sales and regulatory credits) came in at $3.08 billion. Automotive gross margin came in at 15.9%, down from 18.3% reported in fourth-quarter 2023 and missed our forecast of 18.4% amid lower-than-expected revenues. Tesla’s operating margin declined 204 basis points year over year to 6.2% in the quarter under discussion and also lagged our estimate of 8.4%.
Energy Generation and Storage revenues came in at $3.06 billion in fourth-quarter 2024, rocketing 113% year over year and breezing past our estimate of $2.6 billion. Notably, energy storage deployments came in at 11 GWh, exceeding our projection of 9.2 GWh.
Services and Other revenues were $2.84 billion, up 31.5% year over year. However, the metric fell short of our estimate of $2.99 billion. Tesla ended fourth-quarter 2024 with 65,495 Supercharger connectors.
Tesla had cash/cash equivalents/investments of $36.56 billion as of Dec 31, 2024, compared with $29 billion on Dec 31, 2023. Long-term debt and finance leases, net of the current portion, totaled $5.7 billion, up from $2.8 billion as of Dec 31, 2023.
Net cash provided by operating activities amounted to $4.8 billion in fourth-quarter 2024, up from $4.37 billion in the year-ago period. Capital expenditure totaled $2.78 billion in the quarter under review. Tesla generated a free cash flow of $2.03 billion during the reported quarter compared with $2.06 billion generated in the fourth quarter of 2023.
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -11.82% due to these changes.
At this time, Tesla has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Tesla has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
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