1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 88
YTD Stock Price Performance: -20%
Tesla, Inc. (NASDAQ:TSLA) is an Austin, Texas-based designer and manufacturer of EVs.
The company has an industry leadership position in technology but has seen a decline in stock price due to uncertain macroeconomic circumstances slowing down the sales of EVs. Furthermore, the focus of the company’s CEO Elon Musk has been called into question in recent times as he has recently acquired the social media and microblogging site Twitter for a huge sum of $44 billion.
Joseph Spak at RBC Capital thinks that Tesla, Inc. (NASDAQ:TSLA) stock could remain under pressure as expectations related to gross profit margin are recalibrated amongst the investor community. The company has slashed its prices in the Chinese market to grow its market share and compete with the local Chinese EV makers. However, once the expectations are recalibrated, Tesla, Inc. (NASDAQ:TSLA) has the potential to generate healthy earnings and cash flows for its investors. The analyst issued the report on December 15 and assigned Tesla, Inc. (NASDAQ:TSLA) stock an Outperform rating with a target price of $225.
Baron Funds shared its outlook on Tesla, Inc. (NASDAQ:TSLA) in its Q3 2022 investor letter. Here’s what the firm said:
“Tesla, Inc. (NASDAQ:TSLA) makes fully electric vehicles (EVs), related software offerings, solar and energy storage products, and battery cells. After a tough second quarter that included a prolonged shutdown of one of Tesla’s key manufacturing facilities in Shanghai, the company demonstrated a significant 40% sequential increase in production volumes resulting in another quarterly record of production and deliveries. Despite the second quarter complexities, inflationary pressures, and production ramp-up of two new facilities (Berlin and Austin), the company exceeded Wall Street expectations in the second quarter. It maintained healthy 26% normalized gross margins, achieved industry-leading 18% adjusted operating income margins, and has generated over $14 billion of cash from operations over the past year. Moreover, due to Tesla’s high level of vertical integration and U.S. manufacturing capacity, the company is expected to be one of the key beneficiaries of the Inflation Reduction Act, qualifying for significant manufacturing and consumer-related incentives. We believe these incentives can add up to tens of billions of dollars over the coming decade, while also enhancing Tesla’s competitive advantage versus other automakers. The company also held its second artificial intelligence day, which presented continued advancements in its vehicle self-driving program and showcased its rapidly evolving humanoid robot developments (check out the Optimus videos on YouTube). We continue to believe Tesla is well positioned to benefit from complementary tectonic shifts in the automotive industry, including electrification, autonomous driving, and shared mobility. And, yes, Tesla is still effectively debt free, with over $18 billion of cash on its balance sheet, and investors are even speculating about a stock buyback, a far cry from worries of bankruptcy just a few years ago.”
Follow Tesla Inc. (NASDAQ:TSLA)
Follow Tesla Inc. (NASDAQ:TSLA)
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