What happened
Tesla (TSLA +0.69%) investors have been getting bombarded recently with analyst cuts in second-quarter vehicle delivery estimates and projected financial results. That's understandable considering the global supply chain disruptions and especially COVID-19-related production delays at its Shanghai facility.
The result has been a 10% drop in the stock over the last month, including another dip yesterday. That continued today with some additional news from the company contributing to the decline. Tesla stock was down 3.4% as of 11:12 a.m. ET.
NASDAQ: TSLA
Key Data Points
So what
Today's move followed an announcement last night that the company was cutting 200 jobs and closing its San Meteo, California, office where employees worked to improve Tesla's Autopilot driver assistance systems.
The news really shouldn't be as surprising as some headlines made it seem, however. CEO Elon Musk had already announced the company was going to cut 10% of its salaried workforce. And the positions being eliminated include data labeling for Tesla vehicle videos that can also be outsourced using artificial intelligence technology in some cases. The company also has other offices doing this work. Employees at the California location also already knew the lease was running out and expected the office to be closed, according to CNBC, though it seems some thought they would be relocated rather than laid off.
Now what
Some investors read more into it, however. Musk has said that the company's autonomous driving technology would be key to its future success. So a deep cut in that area frayed some investors' nerves.
Adding to pessimism on the stock today was a fresh analyst cut for upcoming earnings and deliveries along with a sell recommendation on the stock. Citigroup analyst Itay Michaeli believes second-quarter earnings will be lower than expected, causing the analyst to lower the 2022 earnings estimate to $14.06 per share, down from a prior $14.40. However, Michaeli maintained the earnings estimate of $20.36 per share for 2023, according to Barron's.
A sell recommendation seems like short-term thinking based on that analysis. Long-term investors might find a continued decline in Tesla's share price to be a good opportunity if the business is only facing near-term headwinds.
