Tesla (NASDAQ: TSLA) is an EV manufacturer based in California. I am bullish on the stock.
It’s no secret that Tesla CEO Elon Musk is mysterious and sometimes eccentric. That’s why some commentators might have considered it a publicity stunt when last year, Musk declared that he would no longer participate in earnings calls.
That promise turned out to be short-lived. Musk did participate in Tesla’s fourth-quarter 2021 earnings call, which took place on January 26, 2022.
Tesla’s Q4 results were actually quite impressive. Yet, Tesla stock fell anyway after the report because of something that Musk said. Is it possible that the market’s response was overdone, or just wrong?
Blockbuster Deliveries
Tesla stock slid from $1,200 to under $800 recently (and is now near $930), and much of that decline occurred soon after the company released its Q4 financial data.
The market’s reaction didn’t really make sense when we look at the actual numbers. Tesla’s Q4 vehicle deliveries totaled 308,600, which is absolutely outstanding. This result got Tesla close to the million-vehicle delivery milestone, as it brought the 2021 total to 936,172.
Not only that, but Tesla reported revenue of $17.72 billion, beating the consensus estimate of $17.13. Furthermore, Tesla’s fourth-quarter earnings per share (EPS) of $2.54 easily surpassed the estimate of $2.36.
In light of all this, Credit Suisse analyst Dan Levy hiked his rating on Tesla shares to the equivalent of a Buy from a previous Hold rating. Additionally, Levy maintained a price target of $1,025 – and as we’ll see, other analysts on Wall Street are mostly bullish on Tesla stock, as well.
An Honest Moment
Sometimes, investors don’t like it when a company’s CEO openly tells the truth. It seems like they would prefer a comforting lie instead of blunt honesty.
However, Musk isn’t the type of CEO to hide the truth. He says what’s on his mind, and this may have caused a decline in Tesla stock.
During the Q4 earnings call, Musk admitted about Tesla, “We will not be introducing new vehicle models this year. It would not make any sense because we’ll still be parts constrained.”
That quote is probably what caused a negative reaction from the investors. People were hoping for a bigger and better electric Tesla truck or an entry-level Tesla car priced affordably at around $25,000.
Tesla won’t be delivering those in 2022, it seems. Still, the data shows that Tesla is selling plenty of vehicles and raking in the revenue. The company is beating the experts’ earnings expectations, so obviously, Tesla is on the right track, fiscally speaking.
Wall Street’s Take
Turning to Wall Street, TSLA stock comes in as a Moderate Buy based on 17 Buys, seven Holds, and seven Sell ratings. The average Tesla stock prediction is $1,086.61, implying 16.7% upside potential.
The Takeaway
Tesla doesn’t need to introduce new vehicles this year. The company can continue to sell its current vehicle models, which Tesla has been doing very successfully.
Therefore, a $1,000+ price target on Tesla stock is reasonable. I believe that the recent dip was/is just an opportunity to buy the dip and wait for a swift recovery.
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