Electric vehicle leader Tesla Inc (NASDAQ: TSLA) saw shares fall Thursday after announcing fourth-quarter financial results Wednesday and issuing vague guidance on what's ahead for 2024 and beyond.
With Tesla stock down 30.75% in the last six months, a top analyst has presented a strategy aimed at enhancing the company's share performance.
The Tesla Analyst: Wedbush analyst Daniel Ives has an Outperform rating on Tesla and lowered the price target from $350 to $315 after the earnings report. The stock was also removed from the Wedbush Best Ideas List.
The Analyst Takeaways: Ives was among the analysts who were disappointed with the fourth quarter financial report and guidance from Tesla.
"We were dead wrong expecting (Elon) Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand," Ives said after the results.
Ives, who called Tesla's earnings call "another train wreck conference call," shared an updated note Friday that included a top 10 list for Tesla and CEO Elon Musk to help turn around the company as shares struggle.
"In covering disruptive tech stocks since the late 90's there are pivotal moments that have defined some of the most historical tech companies with initial Street reactions at the time that were very negative/dire."
Ives said Tesla is going through one of these moments.
Here are Ives' 10 ideas to turn Tesla around:
- $10 billion share buyback, which comes from having around $30 billion in cash on hand. "Walk the walk, not talk the talk and show confidence to investors."
- Make a new "X Holding" structure that could include AI initiatives like Dojo, Optimus and FSD. Give Musk more control to get to the 25% voting level he has requested.
- Stop price cuts to maintain automotive margins, which are better than other automotive companies.
- Host an AI Day before summer 2024 to provide updates and goals for Dojo, Optimus and FSD.
- To prevent Musk stock sales, get outside capital for X/Twitter.
- Create a new compensation package that will lock Musk in as the CEO through 2030.
- Make timeline for production and delivery of the Model 2 and next-generation sub-$30,000 vehicle.
- Return to issuing formal guidance and goals during conference calls. Ives notes that since the departure of former CFO Zach Kirkhorn, "conference calls have been horror shows."
- Ives says Tesla should also deploy a portion of its $30 billion in cash to "do aggressive AI acquisition spree" and should also bring in outside capital for the artificial intelligence unit of the company.
- Tesla should give long-term targets for its AI efforts and revenue goals.
TSLA Price Action: Tesla shares are up 1% to $184.54 on Friday, versus a 52-week trading range of $152.37 to $299.29. Shares of Tesla are down 26% year-to-date in 2024.