The company’s shares are down more than 27% from a year earlier.
Analysts are struggling to stay bullish when it comes to Tesla. Shares of Tesla fell nearly 15% this week on the heels of a disappointing earnings report and the departure of the company’s chief technology officer.
This is the biggest loss Tesla has experienced since 2013. Here’s an overview of the earnings report as well as how analysts reacted to the news…
An Overview of the Earnings Report
Analysts expected Tesla to lose money during the second quarter, but Tesla managed to beat their expectations — but not in a good way. The company posted losses of $1.12 per share as opposed to the 40 cents per share expected by investors.
The company’s revenue did increase 59% year over year to reach $6.35 billion, but this still fell short of the company’s forecasted revenue of $6.41 billion. And as if the earnings report wasn’t enough, CEO Elon Musk announced during the call with investors that CTO JB Straubel is leaving.
Straubel’s been with Tesla for 15 years and helped the company develop its signature battery technology. Tesla has lost a number of executives in the past year, so this news didn’t go over well. However, Straubel will continue to serve in an advisory role and assured investors that he still has full confidence in Tesla.
Are Analysts Losing Confidence in Tesla?
Straubel may still have confidence in Tesla’s ability to deliver, but the same can’t be said for many analysts. In spite of its second-quarter results, the company reiterated its full-year delivery forecasts of 360,000 to 400,000 units.
But many analysts were skeptical about Tesla’s ability to deliver on this promise. Wedbush analyst Dan Ives referred to the move as a “head-scratcher.” Needham analyst Rajvindra Gill reiterated that analysis by adding, “We are cautious on Tesla’s ability to fulfill these goals as the ramp requires a significant snapback in the second half.”
But some analysts remain bullish when it comes to the stock. Baird analyst Ben Kallo maintained his outperform rating and $355 price target.
Summary
2019 has been a challenging year for Tesla, and the company’s shares are down more than 33% year to date. The company has shown signs of long-term growth, but they seem to be overshadowed by bad news.
Tesla has always been a polarizing stock — there’s not a lot of middle ground when it comes to how people feel about the company. And if the company doesn’t show concrete signs that things are turning around, the stock may continue to struggle for a while.
