Tesla (TSLA) Chief Executive Elon Musk has defied big odds and consistently beat expectations since taking the helm of the electric-vehicle manufacturer in 2008. Now, with the company having reported fourth-quarter earnings that toppled estimates, is Tesla stock a buy?
XTesla recently reported adjusted earnings of $2.54 a share, up 218% from the year-ago period and the fourth straight quarter of triple-digit gains. Revenue jumped 65% to $17.7 billion, above estimates of $17.1 billion.
Moreover, the electric-vehicle maker expects production growth to boom in 2022 despite ongoing supply-chain issues. But TSLA stock dropped as the company said there will be no new EV models this year. This includes the highly anticipated Cybertruck. Instead, Tesla wants to focus on growing production volumes on existing models at its current and new factories.
For now, Tesla has the enviable problem of demand outstripping supply. Production launches in Austin, Texas, and Berlin are key to alleviating these issues, analysts say. Its factory in Germany will eventually produce the bulk of Tesla's vehicles destined for European customers, starting with the Model Y crossover SUV.
Analyst Views On Tesla Stock
Tesla bull Dan Ives at Wedbush said the company's fourth-quarter results were stellar.
"With the chip shortage still a major overhang on the auto space and logistical issues globally, Tesla's impressive earnings beat speaks to an EV demand trajectory that looks quite robust for Tesla with clear momentum heading into 2022," Ives said in a note to clients.
"While there are many competitors in the EV space, Tesla continues to dominate market share while battling through the chip shortage and now is seeing China demand step up big time after facing headwinds earlier in 2021," he said.
Tesla's production ramp-up at both the Berlin and Austin plants will likely be slow at first. But Ives believes the Berlin plant will "alleviate the bottlenecks of production for Tesla globally."
Ives has an outperform rating on Tesla stock and price target of 1,400.
UBS analyst Emmanuel Rosner also maintained a buy rating on Tesla stock, with a price target of 1,200.
"Tesla's relentless focus on driving down costs through new batteries, product localization, scale and efficiency continues to be in strong evidence quarter after quarter, and should accelerate with this year's projects," Rosner wrote in a note to clients.
Will Massive Expansion Bolster TSLA Stock
Tesla has undertaken a massive expansion of its manufacturing capabilities. Musk wants to eventually build 20 million electric vehicles a year over the next decade. That's more than double the current production of other auto-making giants. So it's now on a mission to rapidly expand its manufacturing capabilities.
When Tesla starts pumping out cars in Germany, it will go head-to-head in electric vehicles with three established German names: Volkswagen Group (VWAGY), BMW (BMWYY) and the Mercedes-Benz division of Daimler AG (DDAIF).
Other serious competitors include Rivian (RIVN), General Motors (GM) and Ford Motor (F), in addition to its China rivals. Ford's F-150 Lightning electric truck is expected this spring. The first GM electric Silverado, aimed at a limited number of fleet operators, is expected to hit the road in the second quarter of 2023. A consumer version will be available in the fall of 2023.
Checkup On Tesla Stock
According to the IBD Stock Checkup tool, Tesla stock has an IBD Composite Rating of 91 out of 99. When choosing growth stocks for the biggest potential gains based on the CAN SLIM investment paradigm, focus on those with a Composite Rating of 90 or higher.
The stock also has a Relative Strength Rating of 84 out of 99. The rating means that Tesla stock has outperformed 84% of all stocks in the IBD database over the past 12 months.
Its Accumulation/Distribution Rating is C-. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A grade of A signals heavy institutional buying. The lowest rating of E means heavy selling. Think of the C grade as neutral.
In the stock market, timing is critical. So when you're looking for stocks to buy or sell, it's important to do the fundamental and technical analysis that identifies lower-risk entry points that also offer solid potential rewards.
Is Tesla Stock A Buy?
Tesla stock is currently not a buy but it's holding above its 200-day moving average, which is key. The next buy point on Tesla stocks is 1,208.10.
You'll also find alerts to warning signs and sell signals that show when to take your profits or cut short any losses. You'll also discover if the current stock market trend is conducive to buying stocks, or if it's an environment where you want to take defensive action and sell.
Before making any investment decisions, be sure to check current market conditions and use IBD Stock Checkup to see if your stock gets passing ratings for the most important fundamental and technical criteria.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
YOU MAY ALSO LIKE:
Is Rivian Stock A Buy Right Now?
Tesla Stock Vs. BYD Stock: Tesla Growing Fast, But EV Rival Is Catching Up
These Are The 5 Best EV Stocks To Buy And Watch Now
How To Know It's Time To Sell Your Favorite Stock
Find Today's Best Growth Stocks To Watch With IBD 50
The post With Fourth-Quarter Earnings Beating Estimates, Is Tesla Stock A Buy? appeared first on Investor's Business Daily.
from Investor's Business Daily https://ift.tt/JCpXSdn