Is Tesla Stock A Buy Or A Sell 2024

Is Tesla Stock a Buy?

Tesla just released its Q4 report, and it fell short of Wall Street's expectations. Revenue for the quarter reached $25.2 billion, only a 3% increase compared to Q4 2022. This is a departure from Tesla's usual double-digit growth pattern seen over the past decade.

Like much of 2023, Tesla continues to face challenges. The surge in interest rates has created a difficult environment for automakers, making car purchases less affordable for consumers. In response, Tesla has implemented price cuts to drive unit growth. As a result, the company delivered 20% more electric vehicles in Q4 compared to the same period the previous year.

Fourth quarter earnings highlights

Tesla Stock Price falling


  • Total revenue in Q4 grew by 3% YoY to $25.2B, reflecting a significant drop in revenue increase compared to previous years' double-digit growths.
  • Vehicle deliveries have seen a surge as a result of measures implemented to lower prices.
  • Lower revenue recognition from Full Self-Driving (FSD) due to the wide release of FSD Beta in North America in Q4'22


  • Operating income in Q4 decreased YoY to $2.1B, resulting in an 8.2% operating margin. The YoY change in operating income was primarily influenced by:
  • Increased operating expenses, partly driven by AI and other R&D projects
  • Lower revenue recognition from FSD due to the wide release of FSD Beta in North America in Q4'22
  • Cost of Cybertruck production ramp
  • Lower cost per vehicle, including lower raw material costs, logistics costs, and IRA credit benefit


  • Cash, cash equivalents, and investments at the end of the quarter increased sequentially by $3.0B to $29.1B in Q4. This increase was driven by $2.1B in free cash flow and $0.9B from financing activities.

Tesla's Global Price-Cutting Strategy Drives Surge in Deliveries

In 2023, Tesla achieved a significant milestone, delivering over 1.2 million electric vehicles, including the Model Y. This accomplishment solidified Tesla as the best-selling electric vehicle manufacturer globally across all categories. Notably, Tesla also experienced a remarkable 34% increase in deliveries of other electric models like the Model S and Model X.

Tesla vehicle production numbers

Elon Musk says China will "demolish" EV company.

Elon Musk inside a Tesla

In a recent Tesla earnings call, CEO Elon Musk expressed concerns about the growing dominance of Chinese EV makers, warning that they could “demolish” global rivals without the imposition of trade barriers. This comes as BYD, backed by Warren Buffett, surpassed Tesla as the world's top-selling electric vehicle (EV) company in the last quarter. Musk emphasized the rapid advancement of China's EV sector, attributing their success to aggressive innovation and substantial government support. He suggested that the competitive pressure from these companies is intensifying, and without protective measures, it could significantly challenge Tesla's market position and that of other traditional automakers in the future.

Tesla EVs Under Scrutiny by Regulators

As we enter 2024, Tesla is facing increasing pressure from regulatory authorities. A recent investigation by Reuters has uncovered that the electric vehicle (EV) giant has been aware of faulty suspension and steering parts in its entire model lineup for at least the past seven years. However, Tesla has often placed blame on drivers when these components fail.

Norway's traffic safety regulator has confirmed an ongoing investigation into suspension failures in Model S and X vehicles since September 2022. A resolution is expected soon, and a recall is possible.

In addition, Sweden announced on December 22nd that it is also examining similar issues.

The Reuters report has the potential to strengthen ongoing regulatory investigations and provide ammunition for potential class-action lawsuits.

This development follows a recent investigation by the National Highway Traffic Safety Administration (NHTSA), which prompted Tesla to issue an over-the-air software "recall" for more than 2 million vehicles. The investigation revealed that the Autopilot system is susceptible to misuse after reviewing 1,000 accidents.

The NHTSA's probe into Autopilot safety is still ongoing.

Tesla's Financial Growth Scorecard

TSLA stock has been experiencing a remarkable growth trajectory in its earnings. With an impressive annual growth rate of 261.69%, TSLA has been outpacing the average growth rate of the US Automotive segment (which stands at 129.57%) by a significant margin. This outstanding performance has not gone unnoticed, as TSLA's revenue has also witnessed a remarkable increase of over 40.63% over the past 10 years.

Furthermore, when it comes to evaluating TSLA's financial performance, the Return on Equity (ROE) ratio serves as a key indicator. TSLA's ROE stands at an impressive 0.279, which is considerably higher than the average of its peers in the industry (-2.236). This signifies that TSLA has been able to generate higher returns for its shareholders compared to its competitors.

While TSLA's ROE has shown modest growth of 2.93% over the same 10-year period to date, it is worth noting that the company's overall financial performance and growth in earnings remain strong. TSLA's dedication to innovation, sustainable transportation, and the electrification of the automotive industry has positioned it as a frontrunner in the market, solidifying its status as a noteworthy player in the industry.

Analyst Price Target for Tesla

Please Hold

Based on the analysis of 34 Wall Street analysts over the past 3 months, the average price target for Tesla is $220.98, with a high forecast of $345.00 and a low forecast of $23.53. This average price target reflects a 15.34% change from the last price of $191.59. Despite Tesla's strong financial performance and market positioning, analysts currently advise caution due to the stock's valuation and future uncertainties. While recognizing the Tesla automotive and energy side's impressive trajectory, it is important to consider the competitive and economic factors that could impact the company's stock performance shortly.

For the next quarter, TSLA's earnings estimate is $0.68, ranging from $0.40 to $0.94 per share. The previous quarter's EPS was $0.71. TSLA has beaten its EPS estimate 50.00% of the time in the past 12 months, while the overall industry has beaten the EPS estimate 63.16% of the time in the same period. In the last calendar year, TSLA has underperformed its overall industry.

Regarding sales, the forecast for TSLA in the next quarter is $25.62B, ranging from $23.60B to $28.3B. The previous quarter's sales results were $25.17B. TSLA has beaten its sales estimates 25.00% of the time in the past 12 months, while the overall industry has beaten sales estimates 58.74% of the time in the same period. In the last calendar year, TSLA has underperformed its overall industry.


Why is Tesla stock falling?

The recent decline in Tesla's stock price can be attributed to several factors. Market analysts suggest that a cooling of the electric vehicle (EV) "hype," mounting competition in the EV sector, including Chinese electric vehicle companies showing more competition, and broader economic concerns are impacting investor confidence. Furthermore, Tesla faces internal challenges, including managing supply chain issues and production delays. Investors are also weighing the potential risks associated with CEO Elon Musk's involvement with other ventures, like SpaceX and Twitter, which could distract from his leadership at Tesla. Despite these concerns, Tesla's long-term growth potential continues to be supported by its strong brand, innovative technology, and aggressive expansion plans.

Is Tesla a good stock to buy in 2024?

The current consensus among market analysts renders Tesla a HOLD rating at present. This cautious stance reflects the balancing act between Tesla's robust growth potential and the immediate headwinds it faces in the market. While long-term prospects look promising due to Tesla's innovation and expansion, short-term challenges such as market volatility, competition, and executive distractions advise a more reserved approach. Investors are advised to maintain their positions while closely monitoring the evolving industry landscape and Tesla's strategies to navigate its current obstacles.

Is Tesla a profitable stock?

Tesla has demonstrated its profitability, posting impressive financial results for the year 2023. The company reported a revenue of $97 billion and a net income of $15 billion, which are indicative of Tesla's ability to not only generate significant sales but also to manage its costs and operations efficiently. These figures underscore the company's financial health and its successful adaptation to the competitive and dynamic market of electric vehicles.