Tesla's Earnings Flop: Buying Opportunity Or Warning Sign?

Tesla Motors Inc TSLA was trading down more than 9 percent at $245 on Thursday afternoon following the company’s Q2 earnings report. With the company reporting  $1.2 billion in revenue and an earnings per share loss of $0.48, is this post-earnings dip a buying opportunity or an indication that Tesla has a long way to go before it’s worthy of investment?

Here’s what Wall Street is saying about Tesla after the disappointing earnings.

Bank of America

Analyst John Murphy points out that, excluding $27 million in regulatory credits, and the benefit of favorable forex tailwinds during the quarter, Tesla’s core business actually generated an earnings loss of $0.79 during Q2. At Tesla’s current free cash burn rate, Murphy also suggests that “a capital raise could be necessary soon.”

Bank of America has an Underperform rating on Tesla and a price objective of $180 for the stock.

Related Link: Why Tesla Crashed Despite Beating Earnings Expectations

Baird

Analyst Ben Kallo believes Tesla’s “long-term growth is intact” and points out that management confirmed that initial Model X deliveries are on track as well. According to Kallo, Baird “would be buyers” of Tesla prior to the Model X reveal.

Baird has an Outperform rating on Tesla and a $335 target on the stock.

Goldman Sachs

Analyst Patrick Archambault was disappointed with Tesla’s “weak” gross profits and has reduced Goldman’s projected gross margins for the company. Goldman has a Neutral rating on Tesla and a $234 target for the stock.

Global Equities Research

Analyst Trip Chowdhry calls Q2 earnings a “near-term operational hiccup” for Tesla and believes that the company’s long-term fundamentals remain strong. The firm has an Overweight rating on Tesla and a $385 target for the stock.

Pacific Crest

Analyst Brad Erickson sees too much near-term execution risk for Tesla at the moment and “would look for a better entry point before getting involved.” Pacific Crest has a Sector Weight rating on Tesla.

KBB.com

Analyst Karl Brauer believes that Tesla won’t see significant volume growth until the Model X is at full production capacity. “The Model X’s updated styling and SUV fun functionality could create a wave of new Tesla customers, but every week it’s delayed represents lost sales and revenue,” he added.