TSLA stock is “egregiously overvalued”, Roth says

Following another disappointing quarter, Roth MKM analyst Craig Irwin says there’s little to excite investors about Tesla (Tesla Stock Quote, Chart, News, Analysts, Financials NASDAQ:TSLA) in 2024.

The analyst summarized TSLA’s Q423, which he described as “weak”.

“TSLA posted 4Q23 Rev/adj-EPS of $25.2bn/$0.71 vs. ROTHe of $24.8bn/$0.65 and the $25.6bn/$0.74 consensus,” he noted. “Non-GAAP auto gross margins were 17.3% and compare to 16.3% and 24.3% in 3Q23 and 4Q22, respectively, and were inline with the StreetAccount consensus. Reg credits were $433m vs. $554m and $467m reported in 3Q23 and 4Q22, respectively, or a $0.12 benefit to 4Q23 EPS. TSLA incurred a one-time $5.9bn non-cash tax benefit for the release of
valuation allowance on certain DTA’s. Mgmt now expects Tesla’s tax rate to be in-line with S&P 500 peers moving forward (around 20%).”

In a research update to clients January 25, Irwin maintained his “Neutral” rating and price target of $85.00 on TSLA.

The analyst thinks Tesla will generate EPS of $3.13 on revenue of $96.8-nillion in fiscal 2023. He expect EPS of $3.30 on a topline of $1.15-billion in fiscal 2024.

“Mgmt is now leaning on a next-gen vehicle, presumably the MiniCar, to re-initiate growth in ’25 where the new modular manufacturing approach broadly elevates platform execution risk,” Irwin added. “We expect multiple compression considering 3.5% rev growth Y/Y including a headwind of (15%) from mix and price cuts that likely stay negative. We continue to see Tesla’s stock as egregiously overvalued.”