What's Going on With Tesla Stock? | TSLA Stock Analysis

Summary

This video explores the recent surge in Tesla's stock price from $180 to $260 per share within a month, attributing it to two key factors. Despite a year-over-year decrease in vehicle deliveries, investors reacted positively to a smaller decrease quarter-over-quarter, signaling a potential inflection point. Additionally, European tariffs on Chinese-made cars may benefit Tesla more than its competitors, as it could lessen the impact on them compared to Chinese rivals. However, despite these positive signs, Wall Street's earnings per share expectations for Tesla have declined, indicating that the stock price increase is driven by investor enthusiasm rather than immediate financial performance.

Takeaways

• 🚀 Tesla's stock price surged from $180 to $260 per share within a month, indicating a significant rally for the company's shares.
• 📈 The rally was fueled by two major factors: an improvement in vehicle delivery numbers and changes in European tariffs affecting Chinese-made cars.
• 📊 Despite a year-over-year decrease in vehicle deliveries, the second quarter saw a 14.8% increase from the first quarter, which was a positive sign for investors.
• 🔄 The change in delivery trend from a significant drop to a smaller decrease indicated an inflection point, which was well-received by the market.
• 🛠️ Tesla's performance is still strongly tied to its vehicle deliveries, as they are essential for selling software upgrades and expanding its services.
• 🌍 The European tariffs on Chinese-made cars could potentially benefit Tesla, as it may impact its Chinese competitors more negatively.
• 💰 Tesla's valuation increase might be due to the expectation that its competitors will be more affected by the tariffs, reducing competition.
• 📉 Wall Street's earnings per share expectations for Tesla have worsened, not improved, reflecting concerns about the company's financial performance.
• 🏁 Tesla's stock price increase is not based on current or near-future profits but on investor enthusiasm for its long-term potential in AI and self-driving technology.
• 🔮 The market is valuing Tesla based on its future prospects rather than current financials, which is a risky approach as it's speculative.
• 📚 The script contrasts Tesla with Nvidia, which is seeing its value increase due to proven roles in the AI market and expanding revenue, profits, and cash flow.

Q & A

What was the recent significant change in Tesla's stock price?

Tesla's stock price has jumped from $180 per share to $260 per share in just one month.

What is the role of the sponsor mentioned in the video?

The sponsor, mle fo, is mentioned for sponsoring the video and promoting their website full.com parev, which lists the 10 best stocks to buy now.

What was the total number of vehicle deliveries reported by Tesla for the latest quarter?

Tesla reported a total of 443,000 vehicle deliveries for the latest quarter.

How did the year-over-year delivery numbers compare for Tesla in the latest quarter?

The total number of deliveries fell 4.8% from the previous year, marking the second consecutive quarterly decrease.

Why did investors react positively to Tesla's delivery numbers despite a year-over-year decrease?

Investors liked the news because the decrease was smaller than the 88.5% drop in the first quarter, indicating an improvement in the trend of declining year-over-year deliveries.

What is the significance of Tesla's vehicle deliveries for its long-term performance?

Tesla's vehicle deliveries are strongly correlated to its long-term performance as it needs a large fleet of vehicles to sell software upgrades and services like full self-driving and energy solutions.

How do European tariffs on cars made in China potentially benefit Tesla?

The tariffs could negatively impact Tesla's Chinese competitors more than Tesla itself, potentially reducing competition and benefiting Tesla's market share.

What was Tesla's response to the announcement of higher tariffs on electric vehicles imported from China?

Tesla announced that it would increase the prices of its Model 3 in Europe from July 1, following the EU's imposition of provisional higher tariffs.

How have Wall Street's earnings per share expectations for Tesla changed recently?

Earnings per share expectations for Tesla have worsened, with the 2024 EPS forecast dropping from $254 to $2.39.

Why is Tesla's stock price increasing despite lowered earnings expectations?

Tesla's stock price increase is driven by investor enthusiasm and expectations for future growth in areas like full self-driving, driverless car technology, and robotics, rather than current profits or cash flow.

How does Tesla's stock price movement compare to Nvidia's in terms of market perception?

While Nvidia's stock price increase is based on proven roles in the AI market with expanding revenue, profit, and cash flow, Tesla's increase is based on potential future developments and investor optimism.

Outlines

00:00

🚀 Tesla Stock Rally Analysis

The video discusses the significant increase in Tesla's stock price from $180 to $260 per share within a month. The host will explore two key factors behind this rally. As of the recording, Tesla's stock price reached $262 per share. The first factor is the company's quarterly vehicle delivery numbers, which, despite a year-over-year decrease, showed an improvement in the downward trend, leading to a positive market reaction. The second factor is the EU's imposition of higher tariffs on Chinese-made electric vehicles, which could potentially benefit Tesla by impacting its Chinese competitors more severely. The video also touches on Tesla's broader business, including its ventures into energy, robotics, and AI, and how these relate to its vehicle sales and future growth.

05:01

🌐 Impact of EU Tariffs on Tesla and its Competitors

This section of the script delves into the implications of the EU's new tariffs on electric vehicles manufactured in China, where Tesla has a substantial production presence. The company plans to increase the prices of its Model 3 in Europe in response to the tariffs. The video suggests that Tesla's competitors, particularly those based in China, may be more adversely affected by the tariffs, which could be a net positive for Tesla. Despite the positive news, Wall Street's earnings per share expectations for Tesla have declined, reflecting concerns over the company's year-over-year performance and average selling prices. The video contrasts Tesla's stock price increase, which is driven by investor enthusiasm and future potential, with Nvidia's stock price growth, which is underpinned by proven profitability and cash flow expansion in the AI market.

10:01

📢 Call to Action for Channel Subscription

The final paragraph of the script serves as a call to action for viewers to subscribe to the channel. The host mentions that over 90% of the viewers are not subscribed and encourages them to hit the subscribe button for additional benefits, such as a higher likelihood of their requests being addressed. This paragraph is a direct appeal to engage with the audience and increase the subscriber base of the channel.

Keywords

💡Tesla

Tesla is an American electric vehicle and clean energy company known for its innovative electric cars, solar energy products, and battery products. In the video, Tesla's stock price is the central focus, with its significant increase from $180 to $260 per share within a month being a key point of discussion.

💡Stock Price

Stock price refers to the cost at which shares in a company are bought and sold. The video discusses Tesla's stock price rally, which is a substantial increase from one month prior, indicating investor enthusiasm and market sentiment towards the company.

💡Quarterly Vehicle Delivery Numbers

This term refers to the number of vehicles a company delivers to customers within a quarter. In the script, Tesla's delivery numbers for the latest quarter are reported as 443,000, which, despite being a year-over-year decrease, is seen positively by investors due to the sequential increase from the first quarter.

💡Year-Over-Year (YOY)

Year-over-year is a comparison of data points from the same period in two consecutive years. The video mentions a YOY decrease in Tesla's total deliveries but emphasizes the positive sequential growth, which is a change in direction that investors appreciate.

💡Inflection Point

An inflection point is a point at which a change in trend occurs. The video describes Tesla's delivery numbers as reaching an inflection point, where the rate of decline in deliveries has slowed, signaling a potential improvement in the company's performance.

💡Market Share

Market share is the portion of the total market's sales that a company controls. The script discusses concerns over Tesla losing market share to competitors, particularly in the EV industry, which could impact its future growth and profitability.

💡EV Market

EV Market refers to the electric vehicle market, where Tesla is a major player. The video mentions the EV market becoming more competitive with new models and lower prices, which could affect Tesla's position.

💡Tariffs

Tariffs are taxes imposed on imported goods. The script discusses European tariffs on cars made in China, which could impact Tesla's manufacturing presence there. The tariffs are seen as potentially beneficial for Tesla, as they might hurt its competitors more than the company itself.

💡Full Self-Driving

Full self-driving refers to the capability of a vehicle to drive itself without human intervention. The video mentions this as a potential future profit engine for Tesla, where the number of vehicles on the road could translate into more opportunities to sell software upgrades.

💡Forward Price to Earnings (P/E)

Forward P/E is a measure of the price-to-earnings ratio using forecasted earnings for the P/E calculation. The video states that Tesla's stock is trading at a high forward P/E, indicating investor optimism about the company's future earnings potential, despite current earnings expectations being down.

💡Investor Enthusiasm

Investor enthusiasm refers to the excitement and confidence investors have in a company's potential for growth and profitability. The video suggests that Tesla's stock price increase is driven more by investor enthusiasm for its future prospects rather than current earnings or cash flow.

Highlights

Tesla's stock price has surged from $180 to $260 per share within a month.

The rally was fueled by two major factors that changed investor sentiment in the last month.

Tesla's stock price reached $262 per share as of the recording, marking a significant increase.

Tesla reported total deliveries of 443,000 in the latest quarter, a decrease year-over-year but an improvement from the previous quarter.

Investors reacted positively to the decrease in the rate of year-over-year delivery decline.

Tesla's inflection point in delivery numbers was seen as a positive sign by investors.

Concerns about Tesla's market share and position in the EV industry were alleviated by the delivery numbers.

Tesla's performance is strongly correlated to vehicle deliveries for potential software upgrades.

Tesla's quarterly car sales are crucial for expanding the vehicle fleet to sell additional services.

European tariffs on Chinese-made cars could impact Tesla, which has a significant manufacturing presence in China.

Tesla's competitors in China might be more negatively impacted by the tariffs, potentially benefiting Tesla.

Tesla's stock price increase is not based on improving profit or cash flow expectations.

Investors are valuing Tesla based on future potential in full self-driving, robotics, and AI, rather than current earnings.

Tesla's forward price-to-earnings ratio is close to 75, indicating high investor enthusiasm.

Tesla's stock price surge is based on expectations of future profitability, not current financials.

Nvidia's stock price increase is tied to proven roles and financial growth in the AI market, unlike Tesla's future-oriented valuation.

Over 90% of viewers are not subscribed, and subscribing supports the channel with more content and subscriber requests.

Transcripts

hey everyone Tesla's stock price has

been on an absolute tear jumping from

$180 per share to $260 per share in as

little as one month so what's going on

with Tesla stock that's what I'm going

to dive into in this video I'm going to

highlight two major factors that changed

in the last month that have created this

rally for Tesla stock and Tesla stock

investors so let's take a look I want to

thank the mle fo for sponsor ing this

video visit full.com parev for the 10

best stocks to buy now so Tesla stock

price up to

$262 per share as of this recording

that's up significantly from a little

less than $180 per share one month ago

that rally gained momentum following

July 1st when the company updated

investors with its quarterly vehicle

delivery numbers Tesla reported total

deliveries of

443,000 the latest quarter with

production of just 410,000

overy year and the answer is yes it was

a decrease year over-year the second

consecutive quarterly decrease for Tesla

let me share with you why investors

still liked the news so the reason

investors liked the news from Tesla is

that the total number of deliveries in

the second quarter fell 4.8% from a year

earlier but it was an increase of

14.8% from the first quarter what's more

the number in the first quarter was an

88.5% drop in deliveries so Tesla went

from an 8.5% decrease to a smaller

decrease which ended several consecutive

quarters of Tesla's declining

year-over-year deliveries and so that

trend of worsening worsening worsening

improved and so that change in direction

that inflection point was really great

news for investors because they were

concerned that Tesla's deliver were just

keep on declining as the EV Market

became more competitive as the Chinese

competitors launched newer models at

lower prices and really expanded Supply

and then newer models in the US are

causing Tesla to lose market share

investors were concerned about Tesla's

market share and Tesla's position in the

EV industry after it pioneered that

industry so that change in inflection

was a big positive for Tesla stock

investors now I know what you're going

to say Tesla is not just an EV company

Tesla is an energy company EVS Tech

robotics artificial intelligence

Etc still

Tesla's quarterly performance and

long-term performance is strongly

correlated to how many vehicles it

delivers if it wants to sell driverless

technology or for full self-driving it

needs to have vehicles out there the

more Vehicles out there in circulation

the more potential to sell software

upgrades to those Vehicles so if it's

losing market share now that means a

smaller base of cars where Tesla can

sell software upgrades and remember most

of Tesla's competitors are also

investing in the same type of Technology

upgrades that Tesla is investing in and

if Tesla's losing market share to these

Rivals right now that's going to give

the rivals more profit more cash flow to

invest in these latest Technologies and

potentially catch up or leap ahead of

Tesla so quarterly unit Car Sales is

still a big deal for Tesla and Tesla

stock investors as much as they would

like to believe that quarterly Car Sales

don't matter anymore that Tesla's now a

artificial intelligence company that the

only thing that matters is investments

in Ai and driverless car technology that

is only partly true that will drive

growth in the long run for Tesla stock

investors but it still needs to sustain

quarterly delivery numbers in order to

expand the vehicle Fleet so that they

can sell those incremental services like

full self-driving like energy Etc all

right the second big thing that has

changed for Tesla is that Europe

announced tariffs on cars made in China

and of course Tesla has a strong

manufacturing presence in China It

produced nearly 1 million of its

vehicles in China in

2023 and so it's a big player in that

market and it will be impacted by these

European tariffs now Tesla said that it

will increase prices of its model 3 in

Europe from July 1 after the EU said

that it could impose provisional higher

tariffs on electric vehicles imported

from China so that was another step in

working the valuation for Tesla now you

might say why did Tesla's value why

would Tesla's value increase as a result

of this it could be more likely that

Tesla's competitors in China will be

impacted more negatively from these

tariffs compared to Tesla and so that's

why they were hurt more significantly

than Tesla and so because they're going

to be hurt more than Tesla overall it's

a net positive for Tesla because

competition is one of the bigger reasons

why Tesla's valuation has been down or

was down in 2024 before this latest

rally so this was good news for Tesla in

that it will hurt its competition and

its main competition is coming out of

China

those are the models that are lower

priced and similarly speced and gaining

significant Traction in China and so

slowing that down will be a big benefit

for Tesla and Tesla stock investors

surprisingly despite this news about

Tesla's better prospects the Wall Street

earnings per share expectations for

Tesla in the current year and next year

have not improved in fact they've

worsened so 30 days ago analyst on Wall

Street were expecting Tesla to deliver

$254 in EPS in 2024 that's now down to

$2.39 for next year it's down from

$337 down to

$39 so the company's earnings

expectations are worse and that's

understandable because year-over-year

it's still delivering lower Revenue

lower delivery numbers and these

delivery numbers are coming with lower

average selling prices than last year so

it's understandable that Tesla's

earnings this year and next year are

down

but that doesn't fully explain Tesla's

stock price right Tesla stock price is

soaring and Tesla doesn't trade like the

normal stock which looks at profit and

earnings and cash flow Tesla investors

believe that in the future it's going to

have full self-driving driverless car

technology robots and it's going to have

all of these extra profit engines that

are going to drive an exponential

increase in profitability and so they're

willing to pay premium valuations for

Tesla stock it's now trading at a

forward price to earnings of close to 75

so this increase in Tesla's stock price

is not coming on the back of increasing

profit expectations or increasing cash

flow expectations it's just coming on

the back of investor enthusiasm for

Tesla stock and that's always a

dangerous thing it's the opposite of

what's happening with Nvidia nvidia's

value nvidia's price is increasing

because it's increasing profits

increasing cash flow that's not

happening with Tesla Tesla stock price

is increasing ahead of potential revenue

and profit and cash flow expectations of

something way down in the future

something it hasn't yet fully

implemented and it doesn't generate

significant sums of revenue from from

that Source that's creating the

valuation right now so the source of

Tesla's valuation right now is something

that it's going to do several years into

the future and it hasn't yet proven on

that it hasn't yet delivered on those

expectations it's given hints it's given

little signs that it is heading towards

there but not to any degree remotely to

what Nvidia has proven right I'm just

comparing the two because those are two

very popular stocks in the market right

now with two kind of opposite scenarios

where Nvidia has already proven its

substantial role in the AI Market with

Revenue profit and cash flow expansion

where Tesla has only hinted at what it

could do in that category several years

in the future did you know that over 90%

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