AI Summary:
Tesla’s 2024 financial results were disappointing, with several key points highlighted:
- Automotive Revenues: Fell by 8% in Q4 2024 compared to Q4 2023, totaling $19.8 billion.
- Energy and Storage Revenues: More than doubled, growing by 113% to $3 billion in Q4 2024.
- Services: Grew by 31% in Q4 2024, contributing $2.8 billion.
- Total Revenue: Increased by 2% in Q4 2024, but income fell by 23%, with an operating margin of 6.2%.
- Net Profits: Dropped by 71% to $2.3 billion in Q4 2024.
- Annual Performance: Automotive revenues decreased by 6% to $77 billion in 2024. Energy generation and storage increased by 67% to $10 billion. Services grew by 27%, bringing in $10.5 billion.
- Gross Profits: Fell by 1%, with net profits dropping by 53% to $7.1 billion for the year.
- Free Cash Flow: Decreased by 18% to $3.6 billion.
- Regulatory Credits: $2.8 billion of profit came from selling regulatory credits, not from core business activities.
- Future Predictions: Tesla expects energy storage revenues to grow by at least 50% year-over-year and aims to grow automotive sales by more than 60% in 2025.
Despite the poor financial results, Tesla’s share price increased by 103% over the same period.
Net profits $2.3B. “Poor financial results”. How does one reconcile these two things?
But yeah, I live in a country that has had about 0% growth since 2008 :-| Perhaps this is bad news for you rich yankees.
Also note that the automotive industry seems to be pretty much flatlining for the last 5 years or so: https://www.vettafi.com/indexing/index/autos – so Tesla is not doing particurarily badly in the large picture.
That’s 2.3B USD on a 1.29T USD valuation, or 0.17%.
Valuations should be reflective of expected future profits. Multiples of ×20 yearly profit are possible for risky (tech or biotech usually) companies, with large potential profit. But the ratio is ridiculously off the charts for tesla. If it does not improve, it will have turned out to have been a very wastefull use of capital.
The issue is the price to earnings ratio of the Tesla stock which is almost 200:1.
The level of profit is not bad for a normally price company but Telsa needs to have profits grow exponentially to justify their stock price.
It used to be double that, so I can see why people see it as a bad thing. But I also don’t think 7.1B profits qualifies as “poor financial results”, even if it used to be higher.