Tesla (TSLA) stock is spiraling Wednesday after the electric vehicle (EV) and battery maker reported second-quarter earnings that came up short of Wall Street's expectations.
In the quarter ended June 30, Tesla's revenue increased 2.3% year-over-year to $25.5 billion, thanks in part to revenue from its Energy Generation and Storage segment, which doubled to $3 billion. The company also said earnings per share (EPS) declined 43% from the year prior to 52 cents.
"In Q2, we achieved record quarterly revenues despite a difficult operating environment," Tesla said in its earnings release. In addition to rapid growth in its Energy Storage unit, the company adds that it "saw a sequential rebound in vehicle deliveries in Q2 as overall consumer sentiment improved and we launched attractive financing options to offset the impact of sustained high interest rates."
Tesla's results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $24.8 billion and earnings of 62 cents per share, according to CNBC.
The bottom-line miss is likely one catalyst for Tesla's post-earnings slide, but it's being exacerbated by news the company rescheduled its robotaxi event. Indeed, on Tesla's conference call, CEO Elon Musk said that the company will move its robotaxi unveiling event to October 10. The event was originally scheduled for August 8, but was delayed because Musk wanted to make "important changes to improve the vehicle.
Is Tesla stock a buy, sell or hold?
Tesla stock has performed the worst of the Magnificent 7 stocks on the price chart this year, down nearly 13% so far. However, the consumer discretionary stock has made strides in recent months, up more than 50% since late April.
Still, Wall Street remains on the sidelines. According to S&P Global Market Intelligence, the average analyst target price for TSLA stock is $203.88, which is a discount of roughly 6% to current levels. Additionally, the consensus recommendation is a Hold.
At least one additional analyst moved to the sidelines after earnings, too. Specifically, CFRA Research analyst Garrett Nelson downgraded Tesla to Hold from Buy and lowered his price target to $240 from $250.
"While TSLA shares have rebounded strongly in recent months, with the Robotaxi Day having been delayed until October, we see little in the way of near-term catalysts for the story," Nelson writes in a note to clients. "We move to the sidelines on valuation and pending greater clarity on intermediate-term growth drivers," though Nelson adds that "we continue to believe in the long-term story."
Nelson's $240 price target sits about 8% above where Tesla is currently trading.
