Tesla exceeded analysts’ expectations last week when it reported $17.7 billion in sales, which was higher than Wall Street’s forecast of $16.4 billion. Its earning per share was at $2.54, which beat the predicted figure of $2.26 per share.
However, the electric car Behemoth took a tumble and fell by 7.5% last week. What happened?
Tesla’s numbers are impressive. Its revenue grew by 65% year over year in the fourth quarter and its operating profit margin was at 14.7%. It’s an excellent feat especially when you compare it with General Motor’s operating margin, which stood at 9.5%, and Ford Motor Company’s 2.2%.
It’s not the figures that have been bothering investors but rather, they’re more concerned about what the company plans to achieve in 2022.
Investors didn’t take it well when Tesla reported that it only expected to “achieve 50% average annual growth in vehicle deliveries… over a multi-year horizon.”
The company cited “equipment capacity, operational efficiency and the capacity and stability of the supply chain” as the possible reasons that may prevent it from reaching its target.
The management also admitted that the supply chain issues have caused their factories to run below their capacity. It has been happening for several quarters and the company expects it to continue this year.
That’s basically the reason why Tesla’s stocks took a dive last week.
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Recommended books for further reading:
- Intelligent Investor: The Definitive Book on Value Investing – A Book of Practical Counsel
- Stock Market Investing For Beginners: The Investment Guide – How to benefit from the crisis, invest in stocks and generate long-term passive income incl. ETF and Stock Picking Checklist
- The Financial Times Guide to Investing:The Definitive Companion to Investment and the Financial Markets: The Definitive Companion to Investment and the Financial Markets
- Smarter Investing: Simpler Decisions for Better Results
- Investing Demystified: How to create the best investment portfolio whatever your risk level
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