Shares of Tesla (NASDAQ:TSLA) 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.
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.
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.