Tesla Inc (NASDAQ:TSLA) is about to report earnings after the close on Wednesday in what one analyst is looking considered one of crucial earnings calls because the Elon Musk-led company went public in 2010.
What To Know: Wedbush maintained Tesla with an Outperform rating ahead of the EV maker’s quarterly results.
“While every quarter is significant for Tesla we’d highlight this upcoming call and guidance commentary as some of the vital moments within the history of Tesla and for Musk himself,” Wedbush analyst Dan Ives said in a Tuesday note.
Tesla has experienced a hyper-growth phase over the past few years, dominating share in the EV market, but now the corporate is up against a troublesome macro environment intensified by “fierce competition coming from all angles,” the analyst said.
On top of that, Musk decided to purchase Twitter last 12 months, and lots of Tesla investors who previously viewed the Tesla CEO as a superhero with a red cape now consider him as a villain, he said.
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Within the wake of Musk’s Twitter takeover, many are concerned the Tesla CEO is not as focused on the EV company as he needs to be. Musk has also been seemingly polarizing along with his tweets since acquiring the social media platform.
“Tesla is Musk and Musk is Tesla. With all the concerns about Musk’s attention on Twitter … and other noise created by this ongoing soap opera … it is a key moment of truth for Musk,” Ives said.
The analyst said he shall be on the lookout for Musk to “give investors comfort” by reiterating goals for the 12 months and laying out the corporate’s strategic vision. The Twitter situation shall be in a “shiny highlight” for the Street, the analyst said.
From Last Month: Could Twitter Be Elon Musk’s ‘Biggest Investment Ever’? Jim Cramer Is not Betting Against The ‘Underestimated’ Tesla CEO
Wedbush can even be paying close attention to what Musk says in regards to the string of recent price cuts. Although the firm believes the cuts were needed, it’s on the lookout for additional information on how they are going to impact margins. The firm expects such to be a “key dynamic” on the decision.
Lastly, Wedbush highlighted volumes. The Street judges Tesla based on its longer-term outlook of fifty% growth annually.
“This goal is a double-edged sword in our opinion as 2022 was a painful exercise because the Street every quarter needed to chop their 50% targets to reflect a softer trajectory and that heavily weighed on the stock,” Ives said.
Now Musk must rip the band-aid off and deliver a more realistic goal for 2023 so the Street gets behind the goal, the analyst said.
“We view 35%-40% delivery growth for 2023 because the line within the sand based on whisper numbers with 1.8 million units the overall bogey for the 12 months,” he said.
The analyst firm has a 12-month price goal of $175 on Tesla shares.
TSLA Price Motion: Tesla shares are down 0.51% at $143.01 on the time of writing, based on Benzinga Pro.
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