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James Li
James Li
Articles (1494)  | Author's Website |

Tesla Skids on 4th-Quarter Earnings Miss

Company stays on track to expand production in 2021

January 27, 2021 | About:

Shares of Tesla Inc. (NASDAQ:TSLA), a major electric vehicle manufacturer, traded over 4% lower in aftermarket trading on Wednesday on the back of reporting fourth-quarter 2020 results that underperformed consensus estimates.

The Palo Alto, California-based company reported net income of $270 million, or 24 cents in earnings per share, compared with net income of $105 million, or 11 cents in earnings per share, in the prior-year quarter. Despite this, adjusted earnings of 80 cents per share lagged the consensus estimate of $1.03 in earnings per share.

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Company updates on production plans in several markets

Tesla said in its quarterly shareholder letter that it produced 179,757 vehicles during the fourth quarter of 2020, bring the total vehicle production count to 509,737 for the entire year. Likewise, deliveries during the fourth quarter of 180,570 vehicles brought full-year deliveries to 499,550, in line with management guidance. Revenues of $10.74 billion, which outperformed the consensus estimate of $10.40 billion, stemmed from the growth in deliveries despite the average selling price declining 11% year over year as the company shifted its product mix from the Model S and Model X to the more affordable Model 3 and Model Y.

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The company said that it "remains on track" to begin Model Y vehicle production in its Berlin and Austin, Texas Gigafactory plants in 2021, increasing local delivery potential in Europe.

Stock dips on earnings miss on weak day for markets

On the heels of its earnings miss, shares of Tesla traded at an aftermarket low of $807.63, down approximately 6.5% from its closing price of $883.09. The stock remains significantly overvalued based on Wednesday's price-to-GF Value ratio of 7.43.

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GuruFocus ranks Tesla's financial strength 6 out of 10: Even though debt ratios underperform over 65% of global competitors, Tesla has a high Piotroski F-score of 8, a double-digit Altman Z-score and a cash-to-debt ratio that outperforms over 64% of global automobile companies.

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Gurus with large holdings in Tesla include Ron Baron (Trades, Portfolio)'s Baron Funds, Spiros Segalas (Trades, Portfolio)' Harbor Capital Appreciation Fund and Philippe Laffont (Trades, Portfolio)'s Coatue Asset Management.

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The Dow Jones Industrial Average closed at 30,303.17, down 633.87 points from Tuesday's close of 30,937.04, in one of the weakest market days since October 2020.

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Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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