Investors were left disappointed this week as Tesla posted mixed earnings results, with revenue exceeding expectations but net income falling short. As a result, the stock plummeted by 10%.
The Q2 earnings report revealed a 45% year-over-year net income deficit and a nearly 5% decrease in EV deliveries. CEO Elon Musk also admitted that the transition to more affordable models was proving challenging.
While revenue rose by 2.4% to $25.5 billion, surpassing Wall Street’s estimate of $24.5 billion, the modest beat failed to appease traders.
Tesla Stock Is Expensive vs the Company’s Earnings
Wall Street had anticipated Tesla earnings of $0.61 per share for Q2 2024, but the company fell short, earning only $0.56 per share. This marks the second consecutive quarter of declining profits, causing concern among investors.
With Tesla’s earnings consistently missing EPS estimates for the past four quarters, the trailing 12-month P/E ratio stands at around 98x. Even after the post-earnings decline, further losses may be on the horizon.
Analysts have expressed disappointment in Tesla’s performance, with some highlighting the weakening fundamentals and lack of excitement in the quarterly results.
Robotaxi Delay Adds to Frustration
Adding to the disappointment, Tesla’s highly anticipated robotaxi reveal was delayed from Aug. 8 to Oct. 10. This delay raises concerns about potential underlying issues within the company.
While Musk reassured investors that the delay was to enhance the robotaxi’s features, analysts remain skeptical about the near-term outlook for Tesla stock.
If Tesla fails to impress with its eventual robotaxi reveal and analysts continue to lower their price targets, the stock could face further decline.
Overall, Tesla’s recent earnings report and delays in key initiatives have raised doubts about the company’s future performance. Investors should proceed with caution and closely monitor developments to make informed decisions regarding Tesla stock.