Tesla witnesses 15% correction in its shares for over past 30 days, analysts forsee prospects

Tesla, a leading electric vehicle (EV) company, has seen a correction of more than 15% in its shares over the past 30 days, even though its performance from October to December (Q4) was favorable. The company’s energy and storage business had a 54% increase in the quarter under review, while its services section rose by 37% sequentially.

The company’s stock last traded at $172.25 on Tuesday, down 0.89 percent from its previous close of $173.80 on the Nasdaq.

One of the main causes of the stock’s poor performance, according to the analyst, is Tesla’s 23% year-over-year earnings reduction in 2023. According to the analyst, these dismal results have also affected overall earnings and profitability per vehicle.

Fourth quarter’s performance

A significant one-time tax gain helped Tesla’s net income more than quadruple last quarter, but the company issued a warning about “notably lower” sales growth this year. The Texas-based business reported that from October through December, its net income was $7.93 billion, up from $3.69 billion in the same period last year.

Although revenue was below Wall Street projections, Tesla’s quarterly revenue of $25.17 billion was up three percent from a year before. Tesla reduced prices all across the world throughout the year in an attempt to increase sales and market share, which is why the company’s profits were off.

Steep price reductions in the US and throughout the world throughout the year helped Tesla’s fourth-quarter sales increase by nearly 20%. Official data indicates that on more expensive models, some savings totaled $20,000.

Should one considering acquiring Tesla shares?

Tesla breached the lower trendline at nearly $231, dipping to $161. It is currently trading over $163.57, lower than the key trendline. ‘’At present, the only critical support exists at $159.5. If this level is breached, we can expect TSLA to correct further, even towards the $107 mark,” stated an analyst.

The Trading.biz analyst thinks that since major analysts are still positive about Tesla, the sudden price correction may be excellent news for bargain buyers. For example, Lead Operations Associate Adam Jones of Morgan Stanley continues to have a $380 price objective for Tesla.

Disclaimer: The opinions and suggestions expressed above are those of certain analysts, specialists, and broking firms. Before making any financial decisions, we suggest investors to consult with qualified specialists.