Tesla’s (NASDAQ:TSLA) upcoming Q1 earnings report is a bit of a big deal, even more so than usual. With the story faltering on so many fronts, the EV giant will deliver its Q1 results after the market close on Tuesday (April 23), and it’s no exaggeration to say that the Q1 call comes at a critical time for the company.
That is certainly the opinion of Wedbush analyst Daniel Ives, who underscored the significance of the upcoming event.
“The moment of truth has now arrived for Elon Musk and Tesla with [this] week’s conference call and messaging one of the most important moments in the company’s history in our view,” Ives said. “While we have seen much more tenuous times in the Tesla story going back to 2015, 2018, 2020… this time is clearly a bit different as for the first time many long time Tesla believers are giving up on the story and throwing in the white towel.”
We all know already about Tesla’s terrible Q1 delivery numbers and Ives is anticipating a “rip the band-aid off quarter and a softer outlook.” But more importantly than that will be the commentary from Musk on the way forward and how to shift the narrative to positive once again.
Ives thinks there are 5 key issues Musk must address. First, the company needs to offer a comprehensive strategy on how it plans to reverse the downward trend in China amidst increasing competition and softening demand. Secondly, it should provide “realistic goal posts” for 2024, an essential undertaking in order to address uncertainty surrounding growth, free cash flow, and margins. Thirdly, the company must reaffirm commitment to the Model 2. Fourth, Musk must clarify Tesla’s stance on AI, as his threat to take AI initiatives elsewhere has been an “overhang on the stock that must be alleviated for investors.” Lastly, pertaining to that issue, Ives thinks the announcement of an AI day is required so that investors can get a closer look at the “overall strategy for the AI story.”
All in, while Ives concedes the clock has “struck midnight for Musk to lay out the strategic plan for the future,” he still rates TSLA an Outperform, along with a $300 price target. This suggests upside of a big 104% is in the cards for the coming year. (To watch Ives’ track record, click here)
In contrast to Ives, however, most prefer sitting this one out. Based on a mix of 20 Holds, 7 Buys and 7 Sells, the analyst consensus rates the stock a Hold. Still, at $182.58, the average target makes room for 12-month returns of 24%. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
