Tesla stock jumps on better-than-feared second-quarter report

Pedestrians walk along a street crossing in front of the American electric vehicle company’s official Tesla Motors authorized car dealership in Hong Kong, July 13, 2022.

Budrul Chukrut | SOPA images | Light rocket | Getty Images

Stock Tesla jumped nearly 10% on Thursday, a day after the electric car maker released second-quarter results that came in better than analysts had feared.

Tesla said after the call Wednesday that its quarterly adjusted earnings per share were $2.27, up from $1.81 expected, according to Refinitiv. While the company’s revenue was up 42% year-over-year, the automotive industry’s margins were down due to inflation and increased competition for electric vehicle components.

Some analysts say the company’s outlook came in better than expected, given that it has run into production problems at its factories in Berlin, Texas and Shanghai.

Wall Street also looked positively at its transition to sell 75% of their bitcoin holdingswhich contributed $936 million to its cash flow during the quarter and helped avoid write-offs of the value of those investments as bitcoin faced a dip. Worst quarter in over a decade.

“In short, the quarter turned out better than feared, thanks to Musk and company’s healthy 2H forecast, which looks achievable without margin for error,” wrote analysts Dan Ives and Jon Katsingris of Wedbush.

They maintained their best rating and $1,000 target price for the company. RBC and Jefferies analysts setting targets of $1,100 and $1,050.

However, some analysts have said they don’t expect any major changes in Tesla’s share price in the near future.

“It’s hard to know what’s really rocking the boat in the Tesla consensus until the company reports a larger margin loss and/or we see evidence of a new growth/margin profile in the wake of the Berlin and Austin disaster,” Morgan Stanley’s Adam Jonas wrote in a blog post. Wednesday note.

Tesla has yet to release its quarterly financials, so analysts have been reacting to shareholder reports and executive comments.

Jesse Pound, Michael Bloom and Laura Kolodny contributed to this report.