James Ochoa
Tesla slumped on Q2 earnings miss
Tesla missed earnings estimates for the June quarter, posting 52 cents per share compared with the expected 62 cents. Revenue was $25.5 billion, slightly above the $24.77 billion forecast, while automotive sales and leasing revenue fell 6.5% to $19.9 billion.
Tesla’s electric vehicle sales hit a speed bump in the quarter and lost market share to rivals.
Data from Cox Automotive shows that EV sales for non-Tesla brands in the United States jumped 33% during the first half of 2024. But Tesla’s EV sales fell 9.6%, InsideEVs reported.
However, the company is thriving in its energy business, which includes solar panels, charging stations, and battery packs for residential homes and utility companies.
In the second quarter, Tesla’s energy generation and storage segment generated revenue of $3 billion, double the amount from a year ago’s 1.5 billion.
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“Both Megapack and Powerwall achieved record deployment in Q2, resulting in 9.4 GWh of total storage deployments. Overall, the Energy business achieved record revenues and gross profit in Q2,” the company said in a press release. Megapack and Powerwall are Tesla’s lithium-based battery energy storage products.
The energy segment only accounted for 12% of the total revenue. The most important business of Tesla remains automotive sales, making up nearly 78%.
Analyst says Tesla stock is a buy; here’s why
Despite Tesla’s earnings tumble, investment bank William Blair recently recommended Tesla’s shares.
Analyst Jed Dorsheimer initiated coverage of Tesla with an outperform rating. He says the company is developing an energy ecosystem that is “Apple-esque” when combined with the auto business and longer-term opportunities like artificial intelligence, robotaxi, and robotics.
“We view Tesla Energy as the most underappreciated component of the Tesla story and expect the narrative will shift toward the energy storage business in light of tempered EV expectations in the near term,” Dorsheimer said in his note, adding that Tesla’s Megapack and Powerwall are “industry-leading products.”
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Piper Sandler analyst Alexander Potter also advises buying Tesla stock, citing the company’s growing profits from large stationary batteries and advancements in its full self-driving software.
The analyst projects a 20% long-term gross margin for Tesla Energy and maintains an overweight rating on Tesla shares with a price target of $300.
Tesla closed at $214.11 on Aug. 30, up 3.8%. The shares, however, were down 7.7% for the month and are still down 13.8% for the year.
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