Daily Brief - The Forgotten 7th

TLDR: Tesla, once the darling of Wall Street and a core member of the "Magnificent 7" stocks, has hit a rough patch, diverging from its peers with a less stellar performance.

The dependency on battery materials, with China's stronghold on manufacturing, poses a significant challenge, potentially impacting production and the availability of tax credits critical for Tesla's pricing strategy.

Competition is no less fierce, with players like Ford, General Motors, and BYD offering compelling EV alternatives, thereby eating into Tesla's market share.

As a result, analysts have sharply reduced their profit forecasts for Tesla, with expectations for 2024 taking a substantial hit. This revision reflects concerns over Tesla's growth trajectory in a market where its valuation already resembles that of tech giants rather than traditional automakers.

Despite these challenges, Tesla's innovation engine continues to churn, particularly in AI and self-driving technologies, alongside the anticipated rollout of new, more affordable models.

Moreover, profits from its energy generation and storage business have nearly quadrupled in 2023. This remarkable growth trajectory is set to continue, with expectations for the energy business to outpace automotive in growth rate by 2024.

Asset Spotlight: Oversold Tesla

In the 8 past occurrences when Tesla was oversold, analysis from Toggle indicated a pattern of a median upward movement in the stock's price over the next 3 months.

One of these occurrences was December 2022, when Tesla rocketed 80% over the next 3 months after being similarly oversold.

Market Movers: When Tesla is oversold?

Here is the performance of EV stocks on a 1-month basis post previous episodes when Tesla was oversold:

1. LCID: 34.33%
2. TSLA: 27.54%
3. LI: 18.68%
4. F: 14.98%
5. PSNY: 14.89%
6. GM: 11.34%
7. TM: 5.14%
8. NIO: 5.01%
9. FSR: 4.97%
10. RIVN: 4.86%
11. XPEV: 3.64%
12. VFS: 0.96%

Earnings Update: Coinbase reports tonight

Coinbase has shown resilience amid market volatility. The company reported fourth quarter results that exceeded Wall Street expectations with revenue growth and narrower losses than anticipated.

For this quarter, the consensus is that Coinbase will post a quarterly loss of $0.06 per share, which would represent a significant improvement (+97.6% change) from the previous year. Revenue is expected to reach $731.94 million, marking a 16.4% increase from the same quarter last year.

Discover how other companies could react post earnings with the help of TOGGLE's WhatIF Earnings tool.