Please ensure Javascript is enabled for purposes of website accessibility

Why Tesla Stock Fell on Thursday

By Daniel Sparks - Updated Jan 28, 2021 at 10:56AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company reporting 46% year-over-year revenue growth for its fourth quarter, but shares are still trading lower following the quarterly update.

What happened

Shares of Tesla (TSLA 1.24%) fell sharply on Thursday, declining as much as 7.3% at one point. As of 11:15 a.m. EST, however, the stock was down only 2.4%.

The growth stock's decline follows the electric-car maker's fourth-quarter earnings release. Tesla reported worse-than-expected adjusted earnings per share, likely explaining why shares are down today. 

Model S interior

Alongside its earnings report, Tesla unveiled a new Model S interior. Image source: Tesla.

So what

Tesla announced fourth-quarter revenue of $10.7 billion, up 46% year over year. This was ahead of analysts' average forecast for revenue of $10.4 billion. Adjusted EPS of $0.80 was notably nearly double the $0.41 Tesla reported in the year-ago quarter, but lower than a consensus analyst estimate of $1.03. 

The company's strong revenue and earnings growth was primarily driven by a 61% year-over-year increase in vehicle deliveries.

Now what

Management is optimistic about 2021. The company guided for vehicle deliveries this year to increase more than 50% versus 2020. This is an acceleration from the 36% year-over-year growth in total vehicle deliveries Tesla saw last year.

"While 2020 was a critical year for Tesla, we believe that 2021 will be even more important," management said in the company's fourth-quarter update.

Of course, investors should keep in mind that the stock's lofty valuation has arguably already priced in big growth for years to come.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
$681.79 (1.24%) $8.37

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.