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AAPL   149.84 (-1.27%)
MSFT   241.07 (+1.97%)
META   141.61 (+5.36%)
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AMZN   118.01 (+3.15%)
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NVDA   127.36 (+2.60%)
NIO   17.33 (+0.81%)
BABA   80.99 (+4.01%)
AMD   68.36 (+1.77%)
T   15.83 (+0.64%)
MU   51.00 (+0.83%)
CGC   3.04 (+6.29%)
F   12.18 (+2.27%)
GE   64.46 (-0.02%)
DIS   99.40 (+3.70%)
AMC   7.67 (+2.95%)
PYPL   91.12 (+6.26%)
PFE   44.43 (+0.77%)
NFLX   245.20 (+9.29%)
QQQ   279.94 (+1.99%)
AAPL   149.84 (-1.27%)
MSFT   241.07 (+1.97%)
META   141.61 (+5.36%)
GOOGL   100.05 (+2.62%)
AMZN   118.01 (+3.15%)
TSLA   287.81 (+1.72%)
NVDA   127.36 (+2.60%)
NIO   17.33 (+0.81%)
BABA   80.99 (+4.01%)
AMD   68.36 (+1.77%)
T   15.83 (+0.64%)
MU   51.00 (+0.83%)
CGC   3.04 (+6.29%)
F   12.18 (+2.27%)
GE   64.46 (-0.02%)
DIS   99.40 (+3.70%)
AMC   7.67 (+2.95%)
PYPL   91.12 (+6.26%)
PFE   44.43 (+0.77%)
NFLX   245.20 (+9.29%)
QQQ   279.94 (+1.99%)
AAPL   149.84 (-1.27%)
MSFT   241.07 (+1.97%)
META   141.61 (+5.36%)
GOOGL   100.05 (+2.62%)
AMZN   118.01 (+3.15%)
TSLA   287.81 (+1.72%)
NVDA   127.36 (+2.60%)
NIO   17.33 (+0.81%)
BABA   80.99 (+4.01%)
AMD   68.36 (+1.77%)
T   15.83 (+0.64%)
MU   51.00 (+0.83%)
CGC   3.04 (+6.29%)
F   12.18 (+2.27%)
GE   64.46 (-0.02%)
DIS   99.40 (+3.70%)
AMC   7.67 (+2.95%)
PYPL   91.12 (+6.26%)
PFE   44.43 (+0.77%)
NFLX   245.20 (+9.29%)

Why Will Highly-Valued Tesla Move Higher? Results

Why Will Highly-Valued Tesla Move Higher? Results

Results Are Why Highly-Valued Tesla Will Move Higher 

Tesla (NASDAQ: TSLA) reported a mixed quarter but the shares are moving higher anyway. The shares are moving higher because, although mixed, the margin came in well above the consensus estimate despite headwinds that cut into both the top line and margins. Those headwinds are centered in the Covid-related lockdowns in China and they are diminishing, a factor noted by several analysts following the report, and that means a high potential for outperformance in the back half of the year

“The more cars that rattle through Tesla’s enormous gigafactories the lower the per-unit costs, so the disappointing delivery numbers released earlier this month meant investors had already braced themselves for a step down in profitability,” wrote Hargreaves Landsdown analyst Laura Hoy in her note to clients. “On the bright side, this should be a short-term problem. As we saw in the first quarter, fully functioning factories send dollars straight to the bottom line. Once supply chain bottlenecks ease and the factories are humming along at full capacity, margins will get a boost.”

Tesla Proves Resilient In Tough Times 

Tesla had a good quarter despite the shut-downs in Shanghai that affected production throughout the quarter. The company reported $16.93 billion in net revenue for a gain of 41.6% over last year. The gain was driven by pricing increases and volume but in line with the analyst's estimates, a fact mitigated by ramping production in Shanghai and the new Gigafactories in Berlin and Austin. The only bad news is the company reported a slight dip in deliveries but that too is mitigated by the Shanghai shutdowns. The net result of orders and deliveries is a growing backlog that shows no sign of shrinking. 


“We continued to make significant progress across the business during the second quarter of 2022. Though we faced certain challenges, including limited production and shutdowns in Shanghai for the majority of the quarter, we achieved an operating margin among the highest in the industry of 14.6%, positive free cash flow of $621M and ended the quarter with the highest vehicle production month in our history,” said Tesla in the earnings report. 

In regard to the margin and earnings, the automotive margin fell 50 basis points YOY and 500 basis points sequentially to 27.9% but well above the consensus. This left the adjusted earnings at $2.27 which is $0.47 above the Marketbeat.com consensus. The takeaway here is the company is proving its earnings power despite the impacts of inflation and these results improve as production ramps. 

The Analysts Are Driving Tesla Higher 

The analyst activity in Tesla remains mixed but the sentiment is firming and the price target stabilizing. The Marketbeat.com consensus rating is still a Hold but that is a very firm Hold verging on Buy and up in the last quarter due to some upgrades. The consensus price target is down from its peak and assumes the stock is fairly valued at current levels but we think the bottom is in as far as it goes. There have been eight shout-outs so far including 6 price target upgrades and 2 downgrades that are both above the consensus. 

Turning to the charts, the wave of positive commentaries that came out after the earnings release has the stock moving higher. The price action in Tesla is up more than 6.0% and trying to break out to a new high. The break-out, if and when it comes, could easily lead the stock up to the $960 level and our target for stiff resistance. 

Why Highly-Valued Tesla Will Move Higher 

Tesla is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Tesla (TSLA)
2.2441 of 5 stars
$287.81+1.7%N/A104.03Hold$286.50
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Tesla right now?

Before you consider Tesla, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Tesla wasn't on the list.

While Tesla currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Thomas Hughes

About Thomas Hughes

Contributing Author: Technical and Fundamental Analysis

Thomas got his start with the markets while working as a Chef. In 2005 a chance invitation to attend the seminar “How To Buy And Sell Your Own Stocks” altered his worldview. Soon trading and stocks consumed his every waking moment to the point of excluding all else. Thomas now enjoys a much different lifestyle engaged in his true passion, uncovering great investments.
Contact Thomas Hughes via email at tmhughes.writeon@gmail.com.
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