Wall Street is bracing for a rocky road ahead for shares of Tesla on the heels of a messy second-quarter print. The electric vehicle giant fell short of Wall Street's earnings expectations , as its auto business came under pressure. Tesla posted adjusted earnings of 52 cents a share, versus an LSEG estimate of 62 cents.
The company also reported a decline in its adjusted operating margin , as it spends on artificial intelligence and discounts its vehicles. The lack of "razzle dazzle" left investors and analysts focused on deteriorating fundamentals, wrote Wells Fargo's Colin Langan, who has an underweight rating on shares. "We are cautious on margins given likelihood of more price cuts & lower volumes.
Moreover, we are concerned about the roll-out of their next models and their demand & margins," he added. TSLA 1D mountain Shares fall after earnings disappointment Shares slumped nearly 11% on Wednesday , with at least two firms — New Street and Cantor Fitzgerald — downgrading shares to neutral. "We see limited (and unreliable) valuation upside, and limited risks of material positive revisions on that time horizon," said New Street's Pierre Ferragu.
"Next inflection in the stock unlikely in the next 12 months." Tesla was riding high prior to releasing its latest quarterly figures. On July 2, the company reported second-quarter delivery figures.
That week Tesla shares rallied more than 27% to briefly erase a year-to-date loss . The stock is down 10% in 2024, but up more tha.