Tesla’s Future Outlook: Analysts Divided on EV Maker’s Prospects

Tesla continues to face financial challenges, with profitability still a distant goal. Despite this, analysts and investors remain optimistic about the company's potential.

Tesla's Turbulent Second Quarter

During the second quarter earnings call, Tesla fell short of expectations and announced a delay in unveiling its Robotaxi technology. The company also grappled with layoffs, key departures, and a decline in car sales in the first half of 2024. However, a group of Tesla experts maintains a positive outlook on the electric vehicle (EV) manufacturer.

Challenges Faced by Tesla

The first half of the year proved to be tumultuous for Tesla, marked by layoffs, executive exits, and recalls of the Cybertruck. Questions arose regarding Elon Musk's dedication to Tesla and his substantial compensation package. The company experienced two consecutive quarters of diminishing car sales, leading to a more than 40% decline in its stock price by April. Despite these setbacks, Tesla has since shown signs of recovery.

Investor Concerns

Tesla's second-quarter earnings report exacerbated existing investor worries, as it failed to meet earnings projections and reiterated the delay in the Robotaxi unveiling. Following the earnings call, Tesla's stock plummeted by nearly 8% in after-hours trading.

Analysts' Divergent Views

While some analysts remain bullish on Tesla, citing a long-term perspective and confidence in the company's innovative endeavors, others express reservations. Gene Munster of Deepwater Asset Management believes in Tesla's potential to lead the automotive industry, emphasizing advancements in automation and driving software. Tasha Keeney from ARK Invest sees Robotaxis as a significant contributor to Tesla's value in the coming years, highlighting its AI-driven nature.

Conversely, Ron Jewsikow of Guggenheim raises concerns about the viability of Tesla's Robotaxi initiative, particularly in comparison to lower-cost alternatives in the Chinese market. Despite diverging opinions, analysts agree that Tesla's future trajectory will be shaped by its ability to navigate challenges and capitalize on emerging opportunities.

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By: shubhangigoel@insider.com (Shubhangi Goel)
Title: Tesla’s Future Outlook: Analysts Divided on EV Maker’s Prospects
Sourced From: www.businessinsider.com/experts-love-tesla-q2-earnings-bullish-bearish-ark-wedbush-deepwater-2024-7
Published Date: Wed, 24 Jul 2024 06:39:07 +0000