Rumors of the temporary suspension of production at the Chinese factory hit Tesla’s stock price hard. On Tuesday (27th), Tesla’s stock price plummeted 11%, and its market value shrank sharply. Tesla has fallen for seven consecutive days, and its monthly, quarterly and annual performance will be the worst since its listing, reflecting weak global demand and CEO Musk’s focus on Twitter.
Shares of the electric car giant fell 11.4% to $109.10 apiece on Tuesday, their worst drop since April and the longest losing streak since September 2018 with seven days of losses. The stock is down 40% for the month, 58% for the quarter and 69% for the year.
After a sharp drop this year, Tesla’s market value has shrunk to regarding $345 billion by Tuesday’s close, falling from the 10th largest market value in the United States last Friday to the 14th largest, being ranked by P&G (PG-US), Walmart (WMT-US),JPMorgan (JPM-US), Huida (NVDA-US) and other companies to overtake, this is completely different from the situation where the scenery will join the S&P in 2022, and even once ranked as the fifth largest in market value.
Global demand for Tesla’s electric vehicles appears to be weakening. Archyde.com and other foreign media reported on Tuesday that Tesla is rumored to have extended its plan to reduce production at its Shanghai plant from December 24 to January next year, and will produce electric vehicles for only 17 days in January next year. The company also launched a price war last week, offering U.S. consumers $7,500 off vehicles delivered by the end of the year.
Other reasons include that following Musk acquired Twitter, the candles burned at both ends, which made investors hesitate. Environmental factors are also unfavorable for Tesla, because rising interest rates usually hurt high-growth stocks, and high inflation and high interest rates also dampen consumer enthusiasm for electric vehicles.
Tesla’s valuation depends on its future growth outlook. “Tesla has been weak this year, in large part because indicators point to weak global demand,” said Roth Capital Partners analyst Craig Irwin.
Irwin believes that Tesla’s estimated revenue growth is still great, but not at the level indicated by its market value. According to analyst estimates, Tesla’s revenue will grow 54% this year, but the growth rate may slow to 37% next year.
Cowen analyst Jeffrey Osborne said: “We believe that Tesla’s market value may have peaked, and the news of over-reliance on the Chinese market and Shanghai factory production cuts is weighing on its stock price.” He speculated that Tesla’s backlog of orders may have been digested, so Start the sale, current lead times are regarding one to two weeks in most parts of the world.
While analysts have lowered their price targets and earnings estimates for Tesla, they remain generally optimistic, with the ratio recommending buying the stock the highest since early 2015.
“Despite the lackluster share price, Tesla’s innovation curve looks to be accelerating, in contrast to other large tech stocks that have only minor product updates and a stagnant pace of innovation,” said Cannard Genuity analyst Goerge Gianarikas. There is still the possibility of “green shoots of recovery”.
Tesla is due to report fourth-quarter earnings in late January, and analysts polled by FactSet now expect adjusted profit of $5.67 a share, down from forecasts of more than $6 in September and August.