Tesla's deliveries didn't live up to the hype. What investors should watch next.

By Emily Bary

One analyst sees upcoming Robotaxi event as 'the next potential catalyst' for Tesla's stock, while another senses some anxiety around it

While Tesla Inc. shares have started October off on a sour note thanks in part to a delivery report that failed to live up to bullish expectations, there's still an action-packed month ahead for the electric-vehicle maker.

Tesla (TSLA) beat the consensus view with its third-quarter delivery numbers, but investors seemed to be looking for more upside as shares dropped 3.5% in Wednesday action. Baird analyst Ben Kallo remains bullish on Tesla shares, however, and expects the delivery report will quickly fade in importance.

"We expect deliveries to be a look-through event with attention quickly shifting to the robotaxi unveiling" due to take place Oct. 10, he wrote.

That's "the next potential catalyst for the stock," agreed Truist Securities analyst William Stein, who rates the stock at hold.

Read: Tesla's stock deserves a 'unique' valuation, according to the newest bull

At the robotaxi event, Tesla is expected to show off its vision for an autonomous fleet, and Kallo also anticipates that the company will show off a lower-cost car then.

Morgan Stanley's Adam Jonas wrote that he and his team "feel investors' sense of anxiety around the topic of autonomous ride-share services," and they think the company will take a two-pronged approach to its robotaxi efforts. The company could be planning both a "fully autonomous app-based cybercab" as well as a "'supervised' autonomous/[full-self-driving] rideshare service."

"We think the latter of these may get the most attention or have the greatest room to surprise investors, at least near term," Jonas wrote. "In fact, we think the vast majority of rides and miles traveled in our Tesla Mobility model through 2030 and into the early 2030s will fall into the FSD/supervised rideshare category where the vehicles are owned by individual drivers or third-party fleets."

The other big event on the horizon for Tesla this month is the company's Oct. 23 earnings report, which will shed light on the company's margins.

"While [average selling prices] have remained constant for most of 2024, lower-than-market financing rates (which are an effective price cut) will be a headwind to margins in Q3," Baird's Kallo wrote. "We expect this pressure to ease in the intermediate to longer term as the rate cut cycle progresses later this year and into 2025."

Don't miss: Tesla is the Apple of energy, analyst says in new bullish call on the stock

Another factor to watch when it comes to Tesla's margins? The impact of the company's Cybertruck, which Kallo predicts saw 14,900 deliveries in the latest quarter. Margins for the Cybertruck are "still a drag but becoming less," he wrote. The vehicle could break even from a gross-margin perspective by the first quarter of 2025, in his view.

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

10-03-24 1004ET

Copyright (c) 2024 Dow Jones & Company, Inc.