Analysts maintain a buy rating and $412 average price target, implying 29% upside despite Tesla’s profit margins shrinking sharply.
Tesla shares fell 15% to $319.69 after its second-quarter earnings report showed a 57% drop in operating income to $398 million, despite revenue rising 26% year-over-year to $28.2 billion. The company delivered 480,126 vehicles, marking its best second-quarter performance ever and surpassing $100 billion in trailing-12-month revenue for the first time.
Revenue growth accelerated from 16% in Q1, but operating margins contracted to 1.4% from 4.1% a year earlier. Adjusted earnings per share declined 18% to $0.33. Automotive gross margins remained relatively stable at 16.9%, with the profit squeeze attributed to costs below the gross margin line.
Wall Street analysts left their price targets largely unchanged, with an average target of $412, suggesting 29% upside from Thursday’s close. The consensus rating remains a buy among the 44 analysts covering the stock.