Tesla Stock Pulls Back To Late-August Lows: What’s Going On?

Shares of electric vehicle maker Tesla, Inc. (NASDAQ:TSLA) fell over 5% in premarket trading on Thursday after the company’s disappointing third-quarter earnings report.

The company reported third-quarter adjusted earnings per share of $0.66, trailing the $0.72 per share consensus estimate. Revenue came in at $23.35 billion, undershooting Wall Street’s consensus target of $24.1 billion. The weaker-than-expected revenue reflected the inelasticity of demand despite Tesla’s string of price cuts and price discounting.

More importantly, the auto gross margin, excluding regulatory credits, fell to 16.3% compared to an expected 17.7%.

Future Fund’s Gary Black said the quality of earnings was poor as it came off higher regulatory credits, which adds 100% to the bottom line without any expenses, and a lower-than-expected tax rate.

The management commentary also did not encourage investors despite the company confirming the Cybertruck launch data.

Tesla bull Daniel Ives reduced the price target for Tesla stock from $350 to $310.

“In a nutshell, we would characterize last night’s conference call as a ‘mini-disaster,’” Ives said. Instead of commenting on the falling margins and the constant price cuts seen globally, Tesla CEO Elon Musk focused on higher interest rates, and FSD/AI investments, and highlighted the difficult path for Cybertruck production over the next 12 to 18 months, he added.

In premarket trading, Tesla stock fell 6.19% to $227.67, according to Benzinga Pro data.

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