Even after missing sales and earnings expectations, Tesla rallied +2.8% on Thursday night. It must be the “Musk effect.” The results illustrated a balance between strong energy storage advances and automotive sector challenges. Although Tesla showed impressive growth in energy storage and vehicle deliveries, its overall financial performance for the quarter highlighted pressures from reduced automotive revenue and operating margins due to aggressive pricing strategies and competitive market dynamics. This is not a great result from our perspective and one that leaves MM comfortably on the sidelines.
- Revenue came in at $25.71 billion, falling short of the projected $27.26 billion while underlying earnings per share (EPS) of $0.73, about 5% below expectations.
Although TSLA is finding support around $US400, and we generally like stocks that can rally on “bad news”, this is one time we want to see the dust settle as the next 12-months remain uncertain with competition intensifying which will continue to impact margins.
MM is neutral TSLA
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