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Tesla (TSLA) stock is slipping Monday morning, just before the company is set to report its first quarter earnings on Tuesday.
CFRA analyst Garrett Nelson joins Morning Brief to discuss the top things Tesla investors are keeping an eye on: sales guidance indicating an auto sales rebound and more information on the company's planned full self-driving roll-out in June.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
the shares of Tesla down a little, uh, near four and a half percent this morning. What are you anticipating this week?
Sure, thanks for having me. There's really two areas, I think investors are going to be focused on. They're looking for clues that Tesla's auto sales will rebound from a very weak Q1 in which their sales, uh, deliveries were down 13% year-over-year. So, um, you know, what will the updated 2025 sales guidance look like? Last quarter, um, they lowered their guidance, uh, pretty significantly, now expecting only growth, uh, slight growth this year. So, um, I think analysts have really taken down their estimates. We're now forecasting a 10% drop in, uh, in sales volume this year. Uh, but that guidance is really going to be, um, I think the the number one thing that analysts are looking for. And then secondly, um, any information regarding the launch of their unsupervised full self-driving in the Austin market, uh, coming up in June. And, uh, as well as any update regarding, um, their future product pipeline. So those are really, I think the key things.
Garrett, comparing the PE ratio for Tesla to the rest of the automobile industry right now. And and I know you kind of look across the entire automotive landscape and really assess what is different about all of these players right now. But Tesla is what? 300x some of the other PEs that we're seeing within this industry, within the sector. What is it that investors are going to be expecting going into this call to make that PE ratio justified?
Yeah, that's a great question. It's always traded at a massive premium to the rest of the industry though, and we think that's justified. So, um, I, you know, Tesla is of course, not only an auto company, but they're involved in energy storage, uh, a business which is growing a lot faster than the auto business and has higher margins, um, robotics, AI, um, as well as we think the the real value here is in the autonomous driving, the full self-driving software that they've continued to improve. And, uh, we'll really get a chance to showcase in in June. I think everyone is will be watching that. But, um, you know, I think Tesla has been really good the last few earnings releasing releases at diverting investor attention away from the various near-term challenges that they face. And there's no doubt they're they're facing some challenges. Uh, EV market share losses across their three major markets of the US, Europe, and China, um, slowing EV demand growth, both domestically and internationally, ongoing pricing pressures, and, uh, uh, you know, disappointing cyber truck volumes so far. So, and really diverting attention, um, keeping investors focused on longer-term catalysts. And so, uh, they've done a really good job at that. And, uh, so I think as much attention will be focused on the conference call as there is on the earnings release.