Tesla (NASDAQ:TSLA) Shares Gap Down on Disappointing Earnings

Tesla, Inc. (NASDAQ:TSLA)’s share price gapped down prior to trading on Thursday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $374.01, but opened at $341.00. Tesla shares last traded at $328.6720, with a volume of 21,966,310 shares traded.

The electric vehicle producer reported $0.33 earnings per share for the quarter, missing analysts’ consensus estimates of $0.50 by ($0.17). Tesla had a return on equity of 3.88% and a net margin of 3.67%.The business had revenue of $28.24 billion for the quarter, compared to analysts’ expectations of $26.42 billion. During the same period in the prior year, the company earned $0.33 EPS. The company’s revenue for the quarter was up 25.5% compared to the same quarter last year.

Key Tesla News

Here are the key news stories impacting Tesla this week:

• Positive Sentiment: Tesla reported record quarterly revenue of $28.24 billion, up 25.5% year over year, and delivered a record number of vehicles, showing the core business is still growing. Tesla Q2 Earnings Report
• Positive Sentiment: Management highlighted progress in autonomous driving, Robotaxi expansion, Optimus production, and FSD adoption, which keeps the long-term AI and robotics story alive for bullish investors. Reuters Robotaxi Update
• Neutral Sentiment: Some analysts still see upside from the company’s autonomy strategy and reaffirmed Buy/Hold ratings, but several also cut price targets after the earnings call, signaling a more cautious stance. Analyst Price Target Cuts
• Negative Sentiment: Tesla missed EPS estimates, posted negative free cash flow for the first time in more than two years, and confirmed about $25 billion in full-year capex, raising concerns that heavy AI/robotics spending is squeezing near-term profits and liquidity. Reuters Cash Burn and Capex
• Negative Sentiment: Investor reaction also turned more negative because Elon Musk emphasized spending “as fast as we can” on AI and gave few near-term details on Robotaxi timing, which made the growth story look more like a long-dated promise than an immediate profit driver. MarketWatch Investor Reaction

Analysts Set New Price Targets

TSLA has been the topic of several recent analyst reports. Morgan Stanley cut their price target on shares of Tesla from $417.00 to $400.00 and set an “equal weight” rating on the stock in a report on Thursday. JPMorgan Chase & Co. lowered their price objective on Tesla from $475.00 to $445.00 and set a “neutral” rating for the company in a report on Thursday. Sanford C. Bernstein upgraded Tesla from an “underperform” rating to an “outperform” rating in a research note on Friday, June 5th. Truist Financial set a $370.00 target price on Tesla and gave the stock a “hold” rating in a research report on Thursday. Finally, Oppenheimer reiterated a “market perform” rating on shares of Tesla in a report on Thursday. Twenty-one analysts have rated the stock with a Buy rating, twenty-one have issued a Hold rating and four have assigned a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of “Hold” and a consensus price target of $406.42.

Insider Buying and Selling

In related news, CFO Vaibhav Taneja sold 2,606 shares of the company’s stock in a transaction on Monday, June 8th. The stock was sold at an average price of $402.20, for a total transaction of $1,048,133.20. Following the completion of the transaction, the chief financial officer directly owned 22,039 shares in the company, valued at $8,864,085.80. This represents a 10.57% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Kathleen Wilson-Thompson sold 26,409 shares of the stock in a transaction on Thursday, April 30th. The stock was sold at an average price of $378.11, for a total value of $9,985,506.99. Following the completion of the sale, the director directly owned 48,399 shares in the company, valued at $18,300,145.89. This represents a 35.30% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 32,015 shares of company stock worth $12,383,640 over the last quarter. Insiders own 19.90% of the company’s stock.

Hedge Funds Weigh In On Tesla

Several institutional investors have recently modified their holdings of TSLA. Northern Capital Management Inc. bought a new stake in Tesla in the 2nd quarter valued at about $225,000. Cookson Peirce & Co. Inc. grew its position in Tesla by 17.3% in the 2nd quarter. Cookson Peirce & Co. Inc. now owns 1,070 shares of the electric vehicle producer’s stock worth $450,000 after purchasing an additional 158 shares during the last quarter. Hunter Associates Investment Management LLC bought a new position in Tesla in the 2nd quarter worth about $350,000. Ignite Planners LLC increased its stake in shares of Tesla by 1.2% in the second quarter. Ignite Planners LLC now owns 17,756 shares of the electric vehicle producer’s stock valued at $7,469,000 after purchasing an additional 216 shares during the period. Finally, Tanager Wealth Management LLP raised its holdings in shares of Tesla by 29.3% during the second quarter. Tanager Wealth Management LLP now owns 1,528 shares of the electric vehicle producer’s stock valued at $643,000 after buying an additional 346 shares during the last quarter. Institutional investors own 66.20% of the company’s stock.

Tesla Stock Performance

The company has a debt-to-equity ratio of 0.09, a current ratio of 2.04 and a quick ratio of 1.62. The stock has a fifty day moving average price of $402.92 and a two-hundred day moving average price of $403.16. The company has a market cap of $1.20 trillion, a P/E ratio of 296.01, a PEG ratio of 12.55 and a beta of 1.80.

About Tesla

Tesla, Inc (NASDAQ: TSLA) is an American company that designs, manufactures and sells electric vehicles, energy generation and energy storage products. Founded in 2003 by Martin Eberhard and Marc Tarpenning, Tesla grew into a vertically integrated mobility and clean‑energy company with Elon Musk serving as its chief executive officer. The company’s stated mission is to accelerate the world’s transition to sustainable energy, reflected in its combined focus on electric drivetrains, battery technology, renewable energy products and software.

Tesla’s automotive business includes a lineup of battery‑electric vehicles and related services.