On July 23, Tesla Motors declined 8.53% in regular trading, trading at $338.12/share with turnover of $23.81 billion. The sell-off was triggered by the company's Q2 earnings report revealing a significant profitability shortfall despite strong revenue growth.
Tesla reported Q2 adjusted EPS of $0.33, missing analyst estimates of $0.50 by over 35%. Operating profit plunged 57% year-over-year to $3.98 billion, yielding a razor-thin operating margin of just 1.4%. Gross margin fell to 16.3%, well below the 19.4% consensus. Free cash flow turned negative for the first time in two years, exceeding negative $1 billion, as capital expenditure surged 142% YoY to $57.9 billion driven by massive AI infrastructure, robotics production lines, and autonomous driving investments.
While revenue of $282.4 billion grew 26% YoY and beat expectations by 7%, the company signaled full-year capex will exceed $250 billion. Management characterized the current period as the most intensive investment phase in company history, with all capital directed toward autonomous driving, energy storage, and humanoid robotics. Morgan Stanley lowered its price target to $400 from $417, while Canaccord Genuity cut its target to $410 from $450.
(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)
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