At Tesla, Xiaotong Zhu Chooses To Exercise Options, Resulting In $4.55M

Disclosed in a recent SEC filing on June 16, Zhu, SVP at Tesla TSLA, made a noteworthy transaction involving the exercise of company stock options.

What Happened: Zhu, SVP at Tesla, exercised stock options for 15,000 shares of TSLA stock. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday. The exercise price of the options was $20.57 per share.

Currently, Tesla shares are trading down 1.64%, priced at $323.74 during Tuesday's morning. This values Zhu's 15,000 shares at $4,547,475.

Unveiling the Story Behind Tesla

Tesla is a vertically integrated battery electric vehicle automaker and developer of autonomous driving software. The company has multiple vehicles in its fleet, which include luxury and midsize sedans, crossover SUVs, a light truck, and a semi truck. Tesla also plans to begin selling more affordable vehicles, a sports car, and offer a robotaxi service. Global deliveries in 2024 were a little below 1.8 million vehicles. The company sells batteries for stationary storage for residential and commercial properties including utilities and solar panels and solar roofs for energy generation. Tesla also owns a fast-charging network.

Key Indicators: Tesla's Financial Health

Revenue Challenges: Tesla's revenue growth over 3 months faced difficulties. As of 31 March, 2025, the company experienced a decline of approximately -9.23%. This indicates a decrease in top-line earnings. When compared to others in the Consumer Discretionary sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Key Profitability Indicators:

• Gross Margin: The company excels with a remarkable gross margin of 16.31%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): Tesla's EPS is below the industry average. The company faced challenges with a current EPS of 0.13. This suggests a potential decline in earnings.

Debt Management: Tesla's debt-to-equity ratio is below the industry average. With a ratio of 0.18, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Market Valuation:

• Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 188.07 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 12.06 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Tesla's EV/EBITDA ratio of 76.05 exceeds industry averages, indicating a premium valuation in the market

Market Capitalization Analysis: The company's market capitalization is above the industry average, indicating that it is relatively larger in size compared to peers. This may suggest a higher level of investor confidence and market recognition.

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Delving Into the Significance of Insider Transactions

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

A Closer Look at Important Transaction Codes

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Tesla's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.