Last Thursday, we saw a 12% decline in Tesla Stock (TSLA), eradicating $80 billion from the company's market value. The crash came as soon as the company warned investors about sluggish electric vehicle sales growth and increased competition from Chinese rivals.
Tesla Faced A Threat From Chinese Rivals
Tesla stock recorded its most substantial decrease in twenty-one months, culminating in its lowest closing price since December 2022. There has been a $210 billion decline in the company's market capitalization since the start of 2024.
The most valuable automaker in the world indicated on Wednesday during an earnings presentation that its sales growth for the upcoming year "may be significantly lower" than in prior years due to its focus on developing the "next-generation" vehicle, which is expected to be a more affordable model.
Notwithstanding a significant 38% increase in deliveries from 2022 to the previous year, Tesla had originally set a 50% annual growth rate target for several years.
Tesla Quarterly Earnings Forecast
There was disappointing data from financial results for the fourth quarter, as adjusted earnings per share decreased by 40% year-over-year and revenue fell short of market expectations, above $25 billion.
Tesla expects a deceleration in the near future in the absence of substantial catalysts. Therefore, the future stock performance needs developments for the company such as the first-quarter delivery update, which is anticipated in early April.
In light of the earnings report for the fourth quarter, analysts have made revisions to their price targets and projections. Notwithstanding these reductions in value, the mean price target set by analysts of $222.36 indicates a prospective increase of more than 21%.
TSLA Stock Technical Analysis
In the daily chart of Tesla stock price, the ongoing price action shows extreme selling pressure from the downbeat earnings forecast in the latest quarter.
Following the market sentiment, the TSLA stock price moved down below the 100-day SMA and formed a bearish crossover with the 20-day EMA. Moreover, the 14-day RSI moved below the oversold 30.00 line, with a bearish MACD Histogram.
Based on this outlook, selling pressure is potent and investors might expect further downside pressure to the 152.35 support level. However, the long-term bullish possibility is still active as the current price trades within the descending channel area. In that case, a pending bullish correction as a mean reversion might be activated after forming a bullish rejection from the 170.00 to 150.00 area.
