Tesla Inc (NASDAQ:TSLA) was scorned by one of its biggest bulls today, when Wedbush Securities lambasted Elon & Co’s “train wreck” Wednesday conference call with investors.
“We wrongly expected adults in the room,” Wedbush admitted, in one of the bank’s nicer post-match comments.
The missive continued: “We have seen very murky times from Tesla and Musk over the last year with last night's quarter and conference call leaving the Street with minimal answers and lots of questions and frustration yet again as this margin/price cut battle continues with a shaky and hopefully trough margin 2024 year ahead
“We were dead wrong expecting Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand....instead we got a high-level Tesla long-term view with another train wreck conference call.
Investors who were eager to hear more of Tesla’s worrying trend toward price cuts came out empty-handed.
Instead, they heard a “much more cautious Musk” provide broad commentary on production and next-gen vehicle timelines instead of any tangible, concrete pricing guidance.
Tesla is under immense costing pressure in China, where domestic competitors are ramping up production of cheaper EVs, leading to margin compression in Tesla’s bottom line.
Unfortunately, these cuts were not addressed in the call, and Tesla bulls were left questioning what’s in store for 2024.
“Unfortunately, Musk & Co did not shut the door on the idea of more price cuts when asked about the margin story amidst a massive expansionary effort, launching its next-gen vehicle platforms, Cybertruck scaling, and fighting ongoing EV demand in this challenging macro environment,” said Wedbush in response to the call.
Musk’s combative persona also stuck its head above the parapet to remind investors of his 25% controlling stake in the Tesla enterprise.
“The near-term Category-4 hurricane around price cuts and lack of granularity, guidance, and communication from Musk and Tesla is a bitter pill to swallow for the bulls,” said Wedbush.
Vitriol aside, Wedbush maintained its outperform rating on Tesla stock, albeit at a lowered price target from $315 to $300, reflecting reduced output estimates.
“Our near-term confidence in the story is shaken, but we remain firm on a long-term bull thesis around Tesla and the broader AI story set to take hold,” said the bank.
The broader market was also shaken; Tesla stock plummeted 9% in pre-market Thursday trades.