Even though it’s worth US$700 billion, Tesla hasn’t quite been living up to expectations lately. Its stocks have been struggling over the last few months, and it did say on Wednesday that it expects to miss its vehicle delivery target this year. The Q3 2022 financial results just came in, and although the company just slightly missed revenue expectations, it delivered on earnings. CEO Elon Musk blames disappointing unit sales last quarter on there not being enough “transportation objects” for the products. Since reporting its Q3 earnings, Tesla has seen a share dip of 17%.
On Wednesday, CEO Elon Musk announced that Tesla will probably start a share buyback in 2023. Depending on board approval, this scheme could range between US$5 billion and US$10 billion. Basically, a company will buy back shares from investors at market price if they think it’s undervalued and they’re looking to boost the price of that stock.
And Musk clearly thinks that Tesla’s stock is undervalued, saying that he can see Tesla eventually being worth more than Apple (US$2.3 trillion) and Saudi Aramco (US$2 trillion) combined. He made a point to also mention that he sees this happening without even including Tesla’s AI product Optimus into the mix.
“I am of the opinion that we can far exceed Apple’s current market cap. In fact, I see a potential path for Tesla to be worth more than Apple and Saudi Aramco combined,” Tesla CEO Elon Musk said. “By the way, I should mention when I said that I see a path,” he added, “I wasn’t including Optimus.”
“I can’t emphasize enough we have excellent demand for Q4 and we expect to sell every car that we make for as far into the future as we can see,” Musk said. “The factories are running at full speed and we’re delivering every car we mak, and keeping operating margins strong.”
During a shareholder deck on Wednesday, Tesla confirmed, “Over a multi-year horizon, we expect to achieve 50% annual growth in vehicle deliveries.”
“This quarter was not rainbows and roses and it leaves investors wanting more from Tesla which is held to a higher standard than every other automaker,” Wedbush analyst Daniel Ives wrote in a client note. “Tesla must now prove again to the Street that the robust growth story is running into a myriad of logistics issues as opposed to demand softening with EV competition coming all angles around the globe.”