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• Tesla reports weaker-than-expected results for its fiscal third quarter.
• Gene Munster shares his view on the electric vehicles behemoth.
• Tesla stock is currently up a whopping 120% versus the start of 2023.

Tesla Inc (TSLA) is in the red in extended trading after reporting its financial results for the third quarter that came in shy of Street estimates.

Gene Munster shares his view on Tesla

The earnings release suggests that Tesla may decide in favour of lowering prices further in the coming months. What it also signals is that the legacy automakers are likely to face big fat challenges in building a successful EV business.

Excluding regulatory credits sales, automotive gross profit margins at 16.3% came in well below 17.5% that experts had forecast. According to Gene Munster of Deepwater Asset Management:

More misses than hits. Automotive gross margin is the central metric because its where the story hinges on, is this a car or tech company. They missed that. That trend is not a friend for Tesla right now.

Tesla shares are still up 120% for the year at writing.

Elon Musk just said AI has the potential to make Tesla $TSLA the most valuable company in the world 🌎🌍🌏 by far

— Evan (@StockMKTNewz) October 18, 2023

Tesla Q3 earnings snapshot

• Earned $1.85 billion versus the year-ago $3.3 billion
• Per-share earnings also declined from 95 cents to 53 cents
• Revenue jumped 9.0% year-over-year to $23.35 billion
• Consensus was 73 cents per share on $24.2 billion revenue

Gross margin stood at 17.9% in the third quarter, as per the press release – a 30 basis points decline sequentially and 720 basis points decline versus a year ago. On CNBC’s “Fast Money”, Munster also said today:

They talked about slowing production growth of Model Y and the miles driven by FSD came a bit below what I had expected. So, in the near-term, this was a disappointment.

Munster did note, though, that Tesla Inc is still far ahead of other big automakers in the U.S.

Tesla to start selling the Cybertruck

On Wednesday, the electric vehicles behemoth also said that its much-awaited Cybertruck will go on sale on November 30^th. The Deepwater expert added:

This will be positive for Tesla shares. They don’t have to sell many. They just have to ramp from 5,000 this year to 150,000 next year. Investors will start to see that having a measurable impact on delivery growth.

Note that Tesla Inc. remains committed to producing around 1.8 million vehicles this year. The EV company is convinced that it will remain ahead of a compound annual growth rate of 50% in 2023.

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