Is Tesla starting to look like just any old carmaker?

By Philip van Doorn

Also: Medicare timing, Apple's bonds, Nvidia and a semiconductor stock screen and numbers for prospective home buyers as mortgage-loan rates near 8%

Shares of Tesla Inc. were up 79% for 2023 through Thursday's close at $220.11, but they were down 15% from a week earlier and down 24% from this year's closing high of $291.26 on July 18.

Tesla (TSLA) CEO Elon Musk's cautious tone when discussing delivery expectations and manufacturing difficulties for the Cybertruck, and the company's third-quarter financial report, in which sales and earnings came in below analysts' expectations, took their toll. But Tesla's price cuts have also been lowering its profit margins.

Tesla is known for being one of the most efficient operators in the auto industry. Here's a look at how the company's quarterly gross margin and its operating margin compare with those of a year earlier, along with similar comparisons for six other large automakers. The figures for Tesla are third-quarter comparisons, while only second-quarter data is available for the others:

   Company                    Market cap. ($bil)  Gross margin  Gross margin, year-earlier quarter  Operating margin  Quarterly operating margin, year-earlier quarter 
   Tesla Inc.                               $699        17.89%                              25.09%            12.84%                                            21.65% 
   Toyota Motor Corp. ADR                   $285        19.56%                              16.38%            15.42%                                            12.74% 
   Honda Motor Co. ADR                       $59        21.56%                              19.99%            12.54%                                            10.02% 
   Ford Motor Co.                            $45        11.50%                              13.77%             8.84%                                            10.93% 
   General Motors Co.                        $40        11.95%                              12.33%            12.79%                                            13.87% 
   Volkswagen AG ADR                         $37        20.11%                              20.91%            18.64%                                            19.61% 
   Nissan Motor Co. ADR                      $17        17.06%                              15.92%            10.16%                                            11.28% 
                                                                                                                                                       Source: FactSet 

Margin data isn't available from FactSet for Stellantis NV, which owns Fiat and Chrysler.

A company's gross margin is its net sales, less the cost of goods or services sold, divided by sales. Net sales are sales minus returns and discounts. The cost of goods or services sold includes the actual costs for making the items or providing the services, including labor. It is a useful measurement of pricing power, and a combination of an expanding gross margin and increasing sales is a good sign.

Operating margins are earnings before interest, taxes, depreciation and amortization (Ebitda) divided by sales.

A year ago, Tesla stood at the top of the heap when it came to profit margins. It will be fascinating to see whether the other six manufacturers show similar declines when they announce their quarterly results.

Full coverage of Tesla with commentary and analysis:

Tesla's broken 'triangle' warns of more stock-selling pressureRatings Game: Tesla's stock falls after earnings. Is Wall Street missing the big picture?EV stocks hit fresh lows as Tesla shares suffer biggest 2-day selloff this yearBarron's: Elon Musk Takes Aim at Powell Over Rates. Why Tesla Has Bigger Problems.Elon Musk says Cybertruck sales will start Nov. 30Barron's: BMW to Adopt Tesla's Charging Plug. Here Are the Holdouts.

Don't assume you will -- or should -- sign up for Medicare at age 65

If you are still working when you turn 65 and have employer-sponsored health insurance, your best move might be to delay signing up for Medicare. Your current plan may cover more healthcare expenses than Medicare, or you might need it to cover your spouse, especially one who is younger than you are. But there are other factors to consider as well, including the possibility of having to pay additional Medicare premiums depending on your income, as Beth Pinsker explains.

One thing to keep in mind is that Medicare doesn't cover the cost of home healthcare, which is often costly and may prove to be an indispensable service. In the Help Me Retire column, Alessandra Malito helps a couple who wonder if it's too late for them to purchase long-term-care insurance. This is how they can estimate how much money they will need if they self-insure.

More about Medicare and retirement planning:

Medicare open enrollment: if you're confused, this program can helpHalf of Medicare Advantage beneficiaries have been on their plans for at least two years. That could be a bad thing.'I'm losing sleep': We're retired and buying a $1.3 million townhouse. With everything going on in the world, is it too risky to make a move?

Apple illustrates the new bond market

Ciara Linnane looks at the new world for investors, comparing the yields on Apple Inc.'s (AAPL) bonds and those of other large technology companies with dividend yields on their stocks.

Mark Hulbert sees a silver lining for income-seeking investors.

William Watts explains why bond yields are expected to head even higher following Federal Reserve Chair Jerome Powell's latest comments about the direction of interest rates.

Market Extra: 'Bond math' shows traders bold enough to bet on Treasurys could reap dazzling returns with little risk

More bond-market news -- Rite Aid's bankruptcy

Rite Aid Corp. (RADCQ) has filed for bankruptcy, and as it operates under a new arrangement with creditors, it will close 154 stores. Here's the full list of stores to be closed.

More on the fallout:

Rite Aid's stock tumbles 55% to join its cratering bonds after bankruptcy filingShares of bankrupt Rite Aid plunge despite meme-stock chatterAs Rite Aid closes some pharmacies, neighborhoods could lose a 'pivotal' piece of America's health system

Is the IRS coming for you?

The Internal Revenue Service has promised "sweeping changes" as it steps up its audits of people with high incomes. Here's how much it has collected through 100 of these audits.

FA Center: The IRS is auditing the rich. Can you fly under the radar if you're not wealthy?

TaxWatch: Do you live in one of these 13 states? The IRS could do your taxes next year -- for free.

A semiconductor stock screen

Sales and earnings estimates for 2025 are now available for most large makers of computer chips and related hardware. So it is time to screen the industry to see which companies, if any, are expected to grow at a pace similar to that of the highflying Nvidia Corp. (NVDA) over the next two years. Among the major names, there is only one.

Related: Taiwan Semiconductor CEO says AI demand not enough to offset cyclicality

A brutal IPO market

Investors had grown used to successful initial public offerings for higher-profile companies in recent years, meaning stocks tended to soar the day they were listed. On the other hand, a newly listed stock may "break price" on its first day, falling below the IPO level, as Birkenstock Holding PLC did last week. Ciara Linnane surveys 95 IPOs over the past 10 years for perspective on the current market weakness.

Take a look at these numbers, as mortgage loan rates get close to 8%

If you take out a mortgage loan in this market, you're looking at interest rates of close to 8% if you go in for 30 years. What does that mean if you are considering buying a home? And what about expectations that rates will come down significantly over the next year?

Aarthi Swaminathan lays out how much you can expect to pay monthly for a median-priced home under various interest-rate scenarios. She also interviewed Fannie Mae CEO Priscilla Almodovar this week, who told "a tale of two mortgage markets."

More housing coverage:

The housing market's fastest slowdown on record in five chartsU.S. home sales fell in September to the lowest level since the Great Recession

Ratings Game -- sometimes the narrative is wrong

The Ratings Game column provides daily coverage of changes to Wall Street analysts' ratings, price targets and financial estimates for well-known companies.

You have probably seen headlines pointing to ESPN as one of Walt Disney Co.'s (DIS) biggest problems, according to analysts. Sometimes the problem is that a company needs to provide more information.

Disney did that on Wednesday, showing investors that ESPN had booked $12.6 billion in revenue for nine months through July 1, with an operating profit of $1.9 billion, for an operating margin of 15.08%. Operating income was down 10% from the year-earlier period, but Wells Fargo analyst Steven Cahall expressed "relief" at the disclosure.

Other analysts were impressed with the ESPN results and favor Disney's stock, even though they still see challenges ahead for the sports unit.

More of the Ratings Game:

CrowdStrike's and Zscaler's stocks are top plays in rocky cybersecurity market, analyst saysBlackstone's earnings miss draws a downgrade at CFRAAmazon expected to benefit as consumers switch back to buying goods, not services

More company news: Netflix is raising prices on some plans. Here's what you need to know.

Difficult work for the Moneyist

Quentin Fottrell -- the Moneyist -- helps readers understand their options when faced with difficult and often painful financial problems. This week he helps a mother with two children who may have gotten a raw deal in a divorce.

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10-20-23 2303ET

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