Tesla Bounces Back: 20% Loss in H1 Recovered in Less Than a Month
$Tesla Motors(TSLA)$ 's shares have been on a wild ride lately, capturing investors' attention with a significant rebound in recent weeks. After a tumultuous 2022 and a whopping 102% surge in 2023, TSLA stock took a 20.4% dive in the first half of this year.
But in just under a month, the electric carmaker has erased all those losses.
Investor enthusiasm for Tesla waned early this year, fueled by rising inventories that forced the company to slash prices to boost sales. Even then, Q1 results were disappointing: deliveries down 9%, revenue down 9%, gross margins dipping 2% to 17.4%, and net income plummeting 55% to just $1.1 billion, pushing free cash flow into negative territory.
Tesla warned of "significantly lower" vehicle production growth in 2024, followed by news of a global headcount reduction of over 10%.
It seemed like bad news after bad news for Tesla shares in H1. Wall Street analysts were cautious, too, until recently when the stock started its comeback.
So, what's powering this Tesla rally?
Well, Tesla shares have surged nearly 27% this July, fueled primarily by better-than-expected Q2 delivery numbers. Deliveries dipped just 4.8% YoY, an improvement from Q1's steeper decline. Crucially, deliveries outpaced production by nearly 9%, signaling inventory burn-off and potential demand rebound post-price cuts.
But the real buzz is around Tesla's upcoming Robotaxi service, originally slated for August 8. Elon Musk just confirmed on X that design changes are pushing back the launch, possibly to October. Tesla's Q2 earnings call on July 23 should shed more light on the company's state of affairs.
Cathie Wood believed Tesla's Robotaxi venture could supercharge its stock, predicting a 10x surge. She envisions Tesla transforming from an EV maker to an autonomous taxi provider, raking in massive profits. Wood sees the autonomous taxi market as an $8 trillion to $10 trillion global opportunity, with Tesla poised to lead the pack.
However, let's be real – Tesla's current delivery numbers, sales, margins, and cash flow are under pressure. The stock may continue to swing until these metrics recover. With a P/E ratio of 64, Tesla's valuation seems steep for a company growing at a slower pace.
Much of the future upside hinges on the success of Robotaxis. If things don't pan out as expected, the stock could face more headwinds.
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Tesla energy has yet another $4b in deferred revenue in addition to the new 15.4GWh ($3.8b) contract with Intersect Power. Tesla is about to takeoff yet again.
Just think of how many people considering buying a Tesla are going to rush and buy one now before any EV credit goes away.
Says a lot to see TSLA sit on top of a tech blood bath rotation and just go higher. Institutions just keep coming despite soft sales.
Going Higher. Tesla so far ahead of legacy automaker, best days ahead.