Tesla reported some big numbers with its second-quarter financials yesterday. But after the numbers have been parsed, and CEO Elon Musk’s comments from the earnings call explored, one thing is clear: there’s no clear opinion about Tesla’s future.
Well, it’s future stock price anyway.
The company’s second quarter revenue was up 47% year-over-year to $24.9 billion. Tesla’s operating income decreased slightly to $2.4 billion in Q2, resulting in a 9.6% operating margin. It’s adjusted EBITA came in at $4.7 billion, up 23% compared to the year-ago period.
That operating margin and its gross margin of 18.2% missed some of analysts expectations for the second quarter. The resulting guidance after the company’s earnings call is an interesting mix of optimism, pessimism and wait-and-see.
Dark side
The EV maker’s always had critics and naysayers, especially during the years it didn’t turn a profit. However, some — despite rising sales and profit numbers — see rough seas ahead for the Texas-based automaker.
“I still think Tesla is egregiously overvalued right now,” Roth Capital Partners analyst Craig Irwin said on Yahoo Finance Live. Irwin has an $85 dollar price target on the company right now, which is down nearly 9% in mid-afternoon trading to the low $266 range.
“We’re very bearish on Tesla,” he added later. “We think people are much better off looking at many of the other names either in conventional auto manufacturers or some of the emerging players as opportunities for investment.”
Bright side
You can’t have one without the other and George Gianarikas, managing director and senior analyst at Canaccord Genuity, is definitely a bull. He cites the company’s commitment to invest in its long-term growth while making sure it’s still making its product available to buyers.
In an interview with CNBC.com, Gianarikis made note of the price cuts not having as big an impact on Tesla’s bottom line as some feared. He also noted the company’s continued investment in AI-related development, especially its Full Self-Driving technology as well as robotics and its 4680 battery cells.
“This is a company that despite an erratic macro-economic environment is still putting the pedal to the metal and investing in projects that should create growth in the long term,” he said during the interview, later suggesting the company is undervalued.
He said the company is outpacing the market in most important metrics, earnings, profits, etc., while developing growth that is sustainable.
The reality
In the wake of the so-so second quarter earnings results and criticism from some analysts, none of those analysts have rushed out and changed their ratings on the stock. Yahoo Financial tracked information for 23 of the 43 analysts that issued ratings on Tesla stock in July, nine issued ratings today that were all unchanged from previous guidance.
The website said eight are buy or strong buy, eight are hold, six are underperform and one is a sell. According to Nasdaq, the consensus rating is: Buy. The average 12-month price target issued in the last three months by analysts is $257 a share.