Tesla's stock, which plummeted by 12% following the announcement of mixed results for the second quarter, has generated significant discourse among investors and analysts alike. Despite experiencing a decline in stock value, Tesla remains steadfast in its commitment to expanding its electric vehicle (EV) offerings. The company's confirmation that "affordable" EVs are set to debut in 2025 suggests a strategic pivot aimed at democratizing access to electric mobility. This move could potentially reshape market dynamics and enhance Tesla's competitive positioning within the automotive sector.
Mixed quarterly results typically indicate inconsistencies in performance metrics such as revenue growth, production volume, or profit margins. In Tesla's case, while some financial indicators may have underperformed relative to expectations, the long-term vision articulated by leadership is critical. The planned introduction of affordable EV models signifies an acknowledgment of market demand for lower-priced options amidst increasing competition from both legacy automakers and emerging companies focused on sustainability.
In the second quarter, Tesla reported revenue of $25.05 billion, more than the $24.63 billion expected, according to estimates from Bloomberg. Tesla reported revenue of $24.93 billion in the same quarter last year. Adjusted profits were shy of estimates, coming in at $0.52 against $0.60 expected.
Adjusted earnings of 52 cents a share for the second quarter trailed the average analyst estimate of 62 cents, according to LSEG. And Tesla’s adjusted operating margin shrank to the lowest in three years, dropping to 14.4% from 18.7% a year earlier. It’s the fourth straight quarter of shrinkage.
Tesla story, including when the company will introduce a new mass-market car to reinvigorate its lineup of vehicles. Musk said on the earnings call Tuesday that Tesla is on track to deliver a new “affordable” car in the first half of next year.
Michaeli rates Tesla stock at Hold and cut his price target to $258 from $274. Baird analyst Ben Kallo maintained his Buy rating on the shares with a $280 price target following the earnings. He is also focused on factors that could lift the shares.
“Next year is coming quickly,” wrote Kallo in a Tuesday report. He acknowledged the weak second-quarter results, but said that “timelines remain intact for the robotaxi unveil as well as the next-generation vehicle alleviating concerns of a longer term push-out.”
Musk repeated his belief in the value of humanoid robots like Tesla’s Optimus, which he said will be used internally at Tesla next year. He upgraded his forecast for internal usage from 1,000 robots — as of last month — to “several thousand” by the end of 2025.
Musk also said that Tesla has completed “most of the engineering” of the next-generation Roadster sports car, which Musk has boasted would be able to hit 60 miles per hour in under a second and would be marked with a $200,000 price tag. The electric car was initially expected to launch by 2021.
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