the tide might have finally turned on Tesla's stock the company reported earnings last night and the stock dropped 9% based on the latest share price the company's now got a market cap of $697 billion and an Enterprise value of 681 billion and looking at the latest numbers it's not hard to see why the stock has dropped total revenue fell 6% from the previous quarter free cash flow was down 74% year-over-year and operating income fell 50 2% Tesla bulls have long claimed that Tesla's incredible operating margins prove that it's no ordinary car maker but the latest operating margin was only 7.6% which is lower than both Toyota and stellantis and these poor results are not only down to Tesla lowering prices total vehicle deliveries were also down by 7% on the quarter so it's clear that Tesla sales are being impacted by a decrease in demand as well this clear clearly has a lot to do with higher interest rates which significantly affect the affordability of new vehicles but it could also highlight the impact of competition from the likes of byd and all the other automakers vying for market share even Tesla's energy segment was a disappointment with Revenue increasing by only 3% against the previous quarter on the positive side Tesla is still on track for a hundred billion of Revenue this year and the company now has 26 billion dollars of cash on the balance sheet there is also a huge amount of demand for the Cyber truck and delivery should start to ramp up any day now meanwhile Tesla's investments in supercharging AI self-driving and robots give the company a number of advantages but Elon Musk also said that there will be enormous challenges in reaching volume production with the cybertruck and making it cash flow positive and the cash flows from Tesla's other projects like robots are likely many years into the future overall Tesla could still dominate the market for electric vehicles but there's no getting away from this declining Trend in Tesla's financials and based on the latest numbers the stock is still expensive at 71 times earnings and 184 times free cash flow this is a stock That Could Fall 30% and still be richly priced which is why I currently give the stock a negative rating but these my personal opinions not Financial advice and I've got no position in Tesla for more detailed investing ideas make sure to visit our website Overlook alpha.com
