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Tesla (TSLA) is set to release its financial results for the fourth quarter of 2024 after the markets close on Wednesday, Jan. 29. Following a stellar 2024, when Tesla shares surged an impressive 62.5%, the momentum has slowed in the early weeks of 2025. The year has not started on a high note for the electric vehicle (EV) giant, casting some uncertainty over its near-term financial and operating performance.
One primary reason for the tempered sentiment is Tesla’s first-ever decline in annual vehicle deliveries. In 2024, Tesla delivered 1.79 million vehicles, marking a 1.1% drop from the prior year and falling short of Wall Street’s projection of 1.806 million units. The fourth quarter was particularly disappointing, with deliveries of 495,570 vehicles missing estimates of 504,770.
Despite this hiccup, optimism among investors remains strong, driven by Tesla’s ambitious ventures beyond EVs. The company’s advancements in Full Self-Driving (FSD) technology, artificial intelligence (AI), Optimus robots, and its plans for robotaxi services continue to generate significant excitement. These innovations represent potential game-changers, promising new revenue streams and reinforcing Tesla’s position as a leader in futuristic technologies. For the market, these long-term opportunities outweigh the short-term challenges of delivery misses, high valuations, and intensifying competition.
Interestingly, Tesla’s stock price seems to have decoupled from its underlying fundamentals. Investor enthusiasm appears to be driven more by the broader narrative surrounding the company’s ambitious plans in autonomous driving, AI, and the potential of the robotaxi market than by the company’s actual performance metrics.
The momentum has only grown stronger since the U.S. election last November. CEO Elon Musk’s support for President Donald Trump has fueled speculation that regulatory changes under the current administration could favor Tesla’s aspirations in autonomous vehicles. Potential fast-tracking of policies to promote autonomous driving could open significant opportunities for Tesla, particularly in the emerging robotaxi market, where the company aims to establish an early lead.
For now, Tesla’s fundamentals — delivery numbers and earnings — may have taken a back seat to its broader vision for the future of mobility and AI. However, this disconnect between performance and valuation will not likely persist forever. At some point, investors will refocus on the company’s financial metrics. Until then, Tesla stock could continue to benefit from the buzz surrounding its ambitious projects and management’s upbeat commentary.
With this background, let’s explore what’s ahead for Tesla stock.
Q4 Earnings: Here’s What Analysts Expect
Tesla’s Q4 revenue could benefit from a year-over-year increase in delivery volumes. However, a key factor weighing on the company’s top line could be lower average selling prices, which may impact overall top-line growth. Adding to this, fourth-quarter deliveries came in below market expectations, potentially causing Tesla to miss Wall Street’s revenue projections.
On the brighter side, Tesla’s cost-efficiency measures continue to shine. The company’s cost of goods sold (COGS) per vehicle is expected to remain low, which could boost its profit margins and bottom line. Furthermore, Tesla’s energy business has been gaining momentum, offering another revenue stream beyond its core automotive operations.
During the third quarter of 2024, Tesla’s energy division posted a record gross margin of 30.5% despite a decline in Megapack volumes. Tesla’s Powerwall continues to witness a high deployment rate, highlighting growing demand for its energy storage solutions. As Tesla expands its energy storage products and vehicle fleet, this segment could grow strongly and support its future profitability.
Regarding earnings, Wall Street forecasts Tesla will post $0.62 per share in Q4, representing an 8.8% increase compared to the $0.57 reported in the same period last year. While Tesla has exceeded earnings expectations in only one of the past four quarters, it delivered an impressive 34.78% earnings beat during the last reported period.
Tesla Stock: What Analysts Are Saying Before Q4 Earnings
As Tesla gears up to release its Q4 earnings, Wall Street analysts maintain a “Hold” consensus rating on Tesla stock. This suggests that much of Tesla's future growth is factored in its current market price, making it less appealing for investors seeking opportunities ahead of the Q4 earnings release.
Another factor keeping analysts cautious is Tesla's valuation. The stock is trading at a hefty 144.2 times its projected 2025 earnings of $2.82 per share, which leaves limited room for upside in the near term.
