Why Tesla Stock Dropped 9% This Week
Shares of Tesla (NASDAQ: TSLA) have fallen 9% this week as of 11:45 a.m. ET Friday, according to data provided by S&P Global Market Intelligence, largely driven by the market's response yesterday to the electric vehicle maker's second-quarter results. While Tesla's quarter was technically better than expected, investors appear to be recoiling after management commentary raised concerns over a combination of margin headwinds and modest delays in scaling up production of the company's upcoming Cybertruck.
To be clear, Tesla's headline numbers were strong; revenue climbed 47% year over year (YOY) to $24.9 billion, handily outpacing estimates of $24.7 billion. Adjusted earnings of $0.91 per share also rose 20% YOY, well ahead of the $0.82 per share analysts were modeling. Tesla's top-line growth was largely driven by record quarterly deliveries, leading to a 46% increase in automotive revenue. Meanwhile, energy generation storage revenue soared 74% to just over $1.5 billion, and services other revenue jumped 47% to $2.15 billion.
However, with revenue growth significantly outpacing earnings growth and operating margin at 9.6% -- down from 11.4% last quarter and 14.6% in the year-ago period -- it's obvious that recent price cuts are weighing on Tesla's profitability. And while the company confirmed that "Cybertruck factory tooling [is] on track," management also vaguely noted that Tesla is still producing only RC (release candidate) builds of the cutting-edge pickup at its Texas plant, leading some to speculate that it might not be able to meet its stated goal of beginning volume production early next year.
Source Fool.com
Tesla Inc Stock
Our community is currently high on Tesla Inc with 75 Buy predictions and 28 Sell predictions.
With a target price of 246 € there is a positive potential of 26.99% for Tesla Inc compared to the current price of 193.72 €.