Tesla Is Firing on All Cylinders; Analyst Says ‘Buy’

Marty Shtrubel

Jul 29, 2021, 12:14 PM

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Tesla (TSLA) hit another milestone when it reported Q2 earnings on Monday, as quarterly net income exceeded $1 billion for the first time in the company’s history.

The figure came in at $1.14 billion, amounting to more than a tenfold increase on the $104 million the company reported in the same period last year.

Tesla also posted beats across the board. Revenue increased by 98% from the same period last year to reach $11.96 billion, ahead of the consensus estimate by $560 million. Non-GAAP EPS of $1.45 came in $0.47 above the Street’s forecast.

At 28.4%, Auto Gross margins were well ahead of the analysts’ 25.3% estimate and were singled out by Wedbush’s Daniel Ives as the quarter’s most eye-catching metric.

“The margin performance was impressive and will be a focus of the bulls with more Street questions around when profitability can be hit ex EV tax credits heading into 2022,” the 5-star analyst said.

 

Elsewhere, Ives notes 2021 also includes plans to construct Model Y vehicles in Berlin and Austin, which the analsyt says is a “positive sign” and will alleviate concerns over the “timeline of these buildouts.”

And although the supply chain issues have yet to be ironed out completely, they appear to be “moderating” which Ives believes leaves Tesla well-positioned to reach 900,000 deliveries this year- the “bogey for annual 2021 numbers.”

There was also a $23 million bitcoin write down/impairment in Q2, although this figure was far below the $75 million+ range some were expecting ahead of the print.

“Overall,” the analyst summed up, “A bullish print that should start to change sentiment on this core EV name to play the green tidal wave for the coming years.”

To this end, Ives reiterated an Outperform (i.e., Buy) rating on TSLA stock, whilst sticking to a $1,000 price target. Investors are looking at upside of ~48% from current levels. (To watch Ives’ track record, click here)

 

Most analysts agree, although several remain skeptical regarding the EV pioneer’s prospects. The stock has a Moderate Buy consensus rating, on account of 10 Buys, 5 Holds and 3 Sells. The projection is for 12-month gains of 13%, given the average price target currently stands at $740.61. (See Tesla stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.