Tesla’s Profitability Challenge
The 2024 Q3 earnings season has shifted into high gear, revealing a varied assortment of company results. Despite recent revenue adjustments that buck historical trends, positive earnings growth is anticipated for the period.
One of the companies under the limelight is Tesla, known for its electric vehicle (EV) production and delivery metrics, which are pivotal in influencing investor sentiment. The Q3 report unveiled a delivery of approximately 463k EVs and a production of nearly 470k units during the period.
However, Tesla has consistently fallen short of expectations in recent delivery results. Margin pressures, stemming from escalating costs, have been a primary factor in the company’s subdued performance in recent quarters.
Coca-Cola’s Share Price Continues to Surge
Contrary to expectations, consumer staple giant Coca-Cola has witnessed an impressive 22% rise in its share value in 2024, closely tracking the S&P 500. This notable performance is particularly striking in a market heavily focused on technology stocks.
Factors Affecting Tesla’s Performance
Revisions ahead of the upcoming quarterly report forecast a slight decline in the Zacks Consensus EPS estimate, indicating a 12% year-over-year decrease. Despite an anticipated 10% increase in sales, the decline in earnings coupled with revenue growth reveals a profitability challenge faced by Tesla.
Coca-Cola’s Path to Growth
Earnings and revenue revisions for Coca-Cola’s upcoming quarter appear flat, with a projected stagnant earnings growth and a minor 3% decline in sales. Positive remarks on profitability and reaffirmation of 2024 guidance could boost the company’s stock post-earnings.
Valuation Analysis
Currently, Coca-Cola’s stock valuation appears reasonable, aligning closely with historical averages. The forward 12-month earnings multiple stands at 23.4X, in line with the five-year median and slightly below the five-year high. While the PEG ratio is relatively high at 3.8X, it remains consistent with historical benchmarks.
Notably, the stock holds a Style Score of ‘D’ for Value, indicating its potential for growth in the market.
Concluding Remarks
Earnings season portrays a moment of revelation for investors, shedding light on the inner workings of various companies.
As Tesla and Coca-Cola gear up for their quarterly releases, investors eagerly await to see how these industry giants will perform in the market.
