Tesla (TSLA) shares are down nearly 9% on Thursday after the EV manufacturer reported its second straight quarter of revenue decline.
The automaker continued to lose share to lower-priced electric vehicles from rivals, resulting in a more-than-expected 16% decline in automotive revenue to $16.7 billion in Q2.
Including today’s plunge, Tesla stock is down some 17% versus its high in the final week of May.
TSLA shares are slipping this morning mostly because the company’s billionaire chief executive, Elon Musk, signaled more turbulence ahead on the earnings call, saying “we probably could have a few rough quarters.”
Additionally, President Donald Trump’s administration’s recently passed tax-and-spending bill, which essentially suspends federal subsidies for EV buyers, will also hurt Tesla’s business moving forward, according to chief financial officer Vaibhav Taneja.
In the earnings release, the finance chief also confirmed that Tesla is adjusting its supply chain to address tariff risks, which prevents the automaker from “guaranteeing delivery orders placed in the later part of August and beyond.”
That said, the EV stock is still up more than 40% versus its year-to-date low in early April.
Despite disappointing sales and disconcerting commentary, loading up on Tesla shares on the post-earnings dip may not be the worst of ideas, argued George Gianarikas, a senior Canaccord Genuity analyst in his research note today.
On Thursday, Gianarikas reiterated his “Buy” rating on the EV stock and raised his price target to $333, indicating over 10% upside from here, as “we may have seen the bottom in growth trends with positive acceleration on the way.”
According to him, the company’s Q3 will benefit from U.S. consumers rushing in to buy an electric vehicle before the tax credits expire in September, and then in Q4 “they have promised new EVs, which should help the comps.”
According to other Wall Street analysts, however, Tesla stock is a “wait-and-see” story at best.
The consensus rating on TSLA shares currently sits at “Hold” only with the mean target of about $298 still indicating potential downside from here.
