Tesla's financial results for the first quarter were disappointing. Revenue fell 9% year-over-year, driven by a decline in vehicle deliveries and lower average selling prices. The company's gross margin has also fallen, from 25.3% in 2021 to 17.4% in the latest quarter.
Despite these challenges, Tesla's stock has risen about 15% since the earnings announcement. This is likely due to optimism about the company's product roadmap, which includes plans to "accelerate the launch of new models" early next year.
However, Tesla's stock is still expensive at a price-to-earnings ratio of 42.5. The market is still giving Musk the benefit of the doubt, but the company's financial results show that it is still struggling with economic- and industry-related challenges.
Unless you have a serious conviction that Musk can deliver on his long-term goals within a reasonable time frame, Tesla stock is best kept on the watch list for now.