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Tesla (TSLA) stock is in focus after the electric vehicle (EV) pioneer's fourth quarter results missed on the top and bottom lines. Adjusted earnings per share (EPS) was $0.73, compared to the $0.75 Wall Street was looking for, while revenue sat at $25.71 billion, less than the $27.21 billion expected.
OTH MKM senior research analyst Craig Irwin joins Market Domination Overtime with Julie Hyman and Josh Lipton to share his instant reaction to the results.
"This is all about adjusted gross margins," Irwin says, adding, "Recall last quarter we said that, 'Hey, you know, there was a big drop in battery prices during the September quarter that boosted the margins by a couple hundred basis points.' The CFO was very clear on the last call. It was not going to repeat. So this is more or less as we expected."
The analyst, who has a Buy rating on Tesla stock with a $380 price target, highlights, "This should be the last quarter of a negative delta like this. They're looking at share gains. They're looking at significant progress in their most exciting businesses, and they got a nice refresher on the why right here. So, we would actually look at this as a buying opportunity."
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Amid concerns about the impact of US President Donald Trump's policies making it harder for EV makers, Irwin says the EV credits that Tesla benefits from are largely "state-driven," adding that there are global credits in other regions.
Tesla stock has surged since Trump's reelection, given Tesla CEO Elon Musk's proximity to the president. Irwin credits the stock's recent climb to "intense enthusiasm for the cyber taxi/robotaxi business and similar enthusiasm for both Optimus [Tesla's humanoid robot] and AI," rather than Musk's role in government.
Watch the video above to hear more about the analyst's thoughts on Tesla following its earnings release.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
This post was written by Naomi Buchanan.