Tesla: shares tumble after margins disappoint
(CercleFinance.com) - Tesla shares fell as much as 14% on Thursday, wiping almost 7 billion dollars off the company's market capitalisation, a day after it reported a disappointing gross margin in its quarterly results.
While Tesla reported stronger-than-expected second-quarter delivery numbers earlier this month, its automotive gross margin of 18.9% came in below the 20.6% that was reported for the same quarter last year.
According to analysts at Wedbush, this disappointing gross margin "fundamentally" calls into question the company's ability to show sustainable profitability.
The broker - which has a "neutral" rating on the share - has cut its corresponding target price from 230 dollars to 220 dollars to reflect this softer margin profile and pushed out profitability looking ahead.
Analysts at Jefferies concurred: "Vehicle gross margin improved but still low for sustainable profitability at this stage," in a note.
The disappointment overshadowed other positive numbers: Tesla's EBITDA turned positive in the past quarter, while its net loss was halved.
"We still see multiple positive catalysts ahead, some of which could materialize rapidly," said analyst Pierre Ferragu at New Street Research.
The bears were winning the fight on Thursday, with the Tesla shares down 14.1% at 227.6 dollars.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
While Tesla reported stronger-than-expected second-quarter delivery numbers earlier this month, its automotive gross margin of 18.9% came in below the 20.6% that was reported for the same quarter last year.
According to analysts at Wedbush, this disappointing gross margin "fundamentally" calls into question the company's ability to show sustainable profitability.
The broker - which has a "neutral" rating on the share - has cut its corresponding target price from 230 dollars to 220 dollars to reflect this softer margin profile and pushed out profitability looking ahead.
Analysts at Jefferies concurred: "Vehicle gross margin improved but still low for sustainable profitability at this stage," in a note.
The disappointment overshadowed other positive numbers: Tesla's EBITDA turned positive in the past quarter, while its net loss was halved.
"We still see multiple positive catalysts ahead, some of which could materialize rapidly," said analyst Pierre Ferragu at New Street Research.
The bears were winning the fight on Thursday, with the Tesla shares down 14.1% at 227.6 dollars.
Copyright (c) 2019 CercleFinance.com. All rights reserved.