Tesla Deliveries Are Soaring. But There's a Catch.

Electric car maker (NASDAQ: TSLA) surprised investors over the weekend when it reported stronger-than-expected vehicle deliveries despite a tough macroeconomic environment. The news sent the stock soaring higher. While many analysts responded to the upbeat report with upbeat sentiment about the stock, some were more cautious. The growth stock's mixed reviews from analysts boil down to one primary factor: Though Tesla's sales are soaring, it's had to cut prices dramatically to do this.

Following Tesla stock's big move higher this week and its staggering year-to-date gain of more than 120%, it may make sense for investors to take some profits. A huge increase in vehicle deliveries is great, but the hit to its bottom line the company will have to stomach to achieve this growth deserves more recognition. Indeed, one analyst even urges investors to consider the idea that Tesla may have to reduce vehicle prices even more going forward.

Tesla delivered about 466,000 vehicles in the second quarter. This was a record for the company, up 83% year over year and 10% sequentially. Furthermore, the strong quarterly results put the company closer in line with its goal to grow annual deliveries at a rate of around 50% year over year. Because of the strong quarter, Tesla's trailing-12-month deliveries have risen 47% year over year.

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Source Fool.com