tiprankstipranks
Tesla: The Road Ahead in 2022
Stock Analysis & Ideas

Tesla: The Road Ahead in 2022

Amid the global chip shortage, Tesla (NASDAQ:TSLA) delivered robust Q4 results. For context, this EV giant delivered a record number of vehicles, while its top and bottom line came in well ahead of analysts’ forecasts. 

In Q4, Tesla delivered 308K vehicles, well ahead of the Street’s estimates of $265K. Further, total revenues increased 65% year-over-year to $17.7 billion and exceeded analysts’ forecasts of $17.1 billion.

Tesla’s adjusted earnings of $2.54 per share jumped 218% year-over-year and surpassed the consensus estimate of $2.36. 

Its strong profitability reflects growth in deliveries, a decline in COGS (cost of goods sold) per vehicle, and strength in other businesses. However, increased raw material and commodity costs remained a drag.

The Road Ahead 

While Tesla’s Q4 financial and operating performance impressed, ongoing supply-chain challenges could play spoilsport. During the Q4 conference call, Tesla CEO Elon Musk pointed out that supply-chain issues could continue to limit output across factories in 2022. 

Nevertheless, Musk remains upbeat and plans to increase manufacturing capacity in 2022. Meanwhile, he projects average annual growth in deliveries of 50% in the coming years. 

Meanwhile, Tesla expects its operating margins to remain strong, benefiting from higher volumes and operating leverage. However, increased supply-chain and commodity costs could remain a drag in the short term. 

In response to Tesla’s Q4 performance, Wedbush analyst Daniel Ives stated that “with the chip shortage still a major overhang on the auto space and logistical issues globally,” Tesla’s Q4 delivery and financial numbers show that “EV demand trajectory” looks strong for Tesla in 2022. 

Ives is bullish on Tesla and maintains a price target of $1,400 (49.4% upside potential). Further, he highlighted its cash-generating capabilities. 

It’s worth noting that Tesla generated operating cash of $4.6 billion in Q4, while its cash and cash equivalents stood at $17.6 billion at the end of the quarter. 

Wall Street’s Take

While Tesla continues to deliver a record number of vehicles, Wall Street analysts are cautiously optimistic about Tesla’s prospects due to the ongoing supply-chain challenges. Tesla sports a Moderate Buy consensus rating based on 15 Buy, 8 Hold, and 7 Sell recommendations. 

Meanwhile, Tesla’s stock price forecast on TipRanks shows decent upside. The average Tesla price target of $1,076.62 indicates 14.9% upside potential to current levels.

Download the TipRanks mobile app now

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Read full Disclaimer Disclosure.

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles