Tesla Stock suffers a loss following earnings. Miss: Reacters among analysts

 Earnings Miss Lead Tesla Stock to Drop

After a dismal second quarter results announcement, Tesla's (TSLA) shares suffered a big decline, falling 12% to $216.72. Although revenue exceeded estimates because to rising regulatory credits, the profitability of the electric vehicle (EV) behemoth dropped more than 40%, well below predictions.

Downgrades by analysts and price target cuts

Adam Jonas from Morgan Stanley

Renowned auto analyst Adam Jonas of Morgan Stanley and a Tesla supporter pointed out that Tesla's perspective has not changed all that much. He said the company's 2024 projection is "mostly identical" to past quarters, implying no change in market consensus.


Cantor Fitzgerald has

Though it boosted its price estimate from $230 to $245, Cantor Fitzgerald downgraded Tesla from "overweight" to "neutral." The company underlined a more cautious short-term value based on Tesla's recent 70% increase within the previous three months.


Goldman Sachs and Citigroup together

Goldman Sachs and Citigroup cut their Tesla price expectations as well. Maintaining a neutral rating, Goldman Sachs decreased its objective from $248 to $230; Citigroup's analyst Itay Michaeli cut his aim from $274 to $258.


Second Quarter Performance: Tesla

For the second quarter, Tesla said that profits dropped 43% to $0.52 per share. Notwithstanding difficult operating conditions, the company's sales increased 2% year over year to $25.5 billion, therefore establishing a quarterly revenue record.


Margins and Regulatory Credits

With vehicle gross margins, excluding leases and regulatory credits, at 14.6% falling short of the predicted 15.1%, Tesla's gross margins dropped by 23 basis points to 18%. From $282 million in Q2 2023, revenue from regulatory credits shot to $890 million, a 216% rise.


Future Projections of Growth

Tesla said that in 2024 "may be notably lower" the car volume increase rate than in the year before. Still, it anticipates expansion in its energy storage division to surpass that of the automobile sector.


Remarks by CEO Elon Musk

Elon Musk, the CEO of Tesla, restated his enthusiasm on self-driving technologies, the Optimus robot, and the forthcoming robotaxi during the results call. From its former date of August 8, Musk revealed that the robotaxi unveiling event has been postponed until October 10.


Mixed Views from Analysts Wells Fargo

Emphasizing that the second quarter's bad fundamentals were clear, Wells Fargo observed that Tesla's stock did not seem to be a "Trump trade." Should former President Donald Trump win the 2024 election and eliminate EV tax benefits under the Inflation Reduction Act, the company cautioned that this might affect Tesla's immediate earnings.


Joseph Spak, a UBS analyst

Joseph Spak of UBS underlined the pressure on Tesla's automotive division, pointing out the constraints of its present fleet and the possible requirement of further promotions. Maintaining a sell rating, UBS set a price objective of $197.


Dan Ives, awedbush Securities Analyst

Long-time Tesla bull from Wedbush Securities, Dan Ives, expressed enthusiasm about the forthcoming robotaxi event, which he says would signal the start of Tesla's AI narrative, valued at $1 trillion over the next few years. Given the larger AI and robotaxi approach, Ives observed that Tesla's possible investments in Musk's AI firm, xAI, may be a wise move.


Investor Attitude and Market Effect

Investor mood had been good despite the earnings shortfall; following a surprise car delivery boost earlier in the month, Tesla shares surged almost 25%. Recently approved by shareholders are Musk's $56 billion compensation plan and reincorporation into Texas from Delaware.


With an 85 Composite Rating, an 89 Relative Strength Rating, and a 61 EPS Rating, Tesla stock presently ranks third in the 35-member IBD Auto Manufacturers business group.


Analyzers and investors both are attentively observing Tesla's strategic actions and market performance as it negotiates the difficulties of the EV space.