in the past week Tesla's stock has taken quite a tumble after a disappointing earnings call and report it dropped by a lopping 16% reaching a low Point not seen since June this decline comes after a remarkable first half of the Year where Tesla's stock soared by more than 100% now it's up around 70% but what caused this sudden downturn Thea Tesla's third quarter earnings were announced many investors were feeling cautious there were a couple of key concerns on their minds first they were worry about the price Cuts Tesla have been making and how those were affecting the company's profit margins the second major concern revolved around the Cyber truck a brand new tester model that investors and customers have been eagerly waiting for years to see in production despite the earnings Miss and the somewhat cautious termin of CEO Elon Musk during the call Gary black the managing partner of the future fund believes that the 16% drop in tesa's stock is mainly due to two factors the ongoing price cuts and a dwindling sense of long-term confidence according to Black after this week no one can deny that investors are very concerned about further price Cuts since volumes are not really responding to the price Cuts already taken in simpler terms investors are worried because even though Tesla lowered prices it didn't lead to a big increase in sales Tesla's gross margins also took a hit falling to 17.9% for the quarter down from 25.1% last year while this could be seen as a short-term issue the earnings call shook many investors faith in the company's long-term prospects Dan eyes a longtime Tesa supporter called the earnings call a disaster he expected must to provide clarity about future price Cuts during the call but instead musk left things uncertain hinting that more price Cuts might be necessary what really shook investors was that during the call must didn't discuss exciting long-term prospects like the Cyber truck greater autonomy robot tax a more affordable $25,000 model or EV adduction all these things usually Drive enthusiasm among investors but they were conspicuously absent following the disappointing earnings report several analysts including some who were previously big tester supporters reduced their price targets for the stock for instance Morgan Stanley's Adam Jonas lowered his price Target from $400 to $380 while Danes reduced his from $350 to $310 they still believe in Tesla's long-term potential but see challenges ahead on the other hand Kathy Woods Arc invest a strong Tesla supporter did not change its outlook on the stock they are betting on Tesla's growth story revolving around robber taxes believing that short-term hiccups won't hinder the company's success in that area Arc even projected that Tesla could be trading at $2,000 per share by 2027 mainly based on the success of Robert taxes Gary black who maintained his price Target at $300 believes that Tesla's value will be driven by three crucial factors the affordability of a $25,000 NextGen vehicle a successful cyber truck roll out and a massive advertising campaign to educate people about electric vehicles in his view all three of these initiatives will eventually come to fruition
