Tesla stock pops on Q4 earnings beat, Wall Street mixed on results

Yahoo Finance’s Pras Subramanian joins the Live show to discuss Tesla’s fourth-quarter earnings beat and what Wall Street analysts are saying about the quarter.

Video transcript

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RACHELLE AKUFFO: All right. Well, Tesla out with a beat on the top and bottom line in its latest quarter, with the stock seeing a pop this morning on the back of its earnings release, as the EV maker eased investor fears of weaker growth. However, the view on Tesla among analysts shows not all is smooth sailing.

Here with the details is Yahoo Finance's Pras Subramanian. Obviously, a lot of people were watching this to see what would happen.

PRAS SUBRAMANIAN: Yeah, Rachelle. You know, big earnings and big call last night. Analyst reaction mixed. A nice pop today in the stock. You have people like Dan Ives calling it the Super Bowl for Tesla.

But you're absolutely right, though. Among others there's been some sort of consternation about what this means. So Goldman's Mark Delaney reiterated his buy rating here, claiming Musk's comments on January orders being to date the strongest ever was, "the most important takeaway from the call." And I tend to agree with that.

On the flip side, Toni Sacconaghi, AllianceBernstein, a noted Tesla bear, reiterated his underperform rating there, saying he's torn after the call and the earnings statement, is concern about margins and whether demand can be sustained at these levels.

Finally, Citi's Itay Michaeli, he raised his price target to $146, claiming the call gave some relief to the bulls. But there are still concerns like margins and that big free cash flow miss last night, which actually kind of flew under the radar. So kind of a mixed bag here from the analysts' point of view, but the stock, there's no discussion, the stock's up 10% today.

RACHELLE AKUFFO: And we knew that margins were going to be a big theme this earnings season. But you mentioned things flying under the radar. What are some of the things that one might have missed from Tesla's earnings?

PRAS SUBRAMANIAN: There was a lot on that call, from Cybertruck to FSD and things like that. But I think under the radar, some stuff, Musk talking about how he wants to maintain strong volume growth while maintaining margins. That's kind of tough in an environment here where margins are under pressure, prices, inflation has been rising. But maybe if prices do come down and you have ramp ups in places like Berlin and Giga Austin, maybe you can have that, both that magic sort of mix of rising margins but lowering prices.

Another nugget that he kind of mentioned that sort of flew under the radar was talking about who could challenge Tesla down the line. Musk said it could likely be a Chinese competitor, because they "work harder and work smarter than anyone else." I thought that was interesting, kind of a diss here to American and the European automakers who are kind of coming at Tesla domestically here but also in Europe too.

RACHELLE AKUFFO: Indeed. A bit of a dig there, I think. I think you're right there.

Pras Subramanian there for us. Thanks so much.