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The S&P 500 ended nearly flat on Friday as gains in defensive sectors and energy offset weakness in megacap growth stocks, while investors looked toward next week's speech by Federal Reserve Chair Jerome Powell.
The S&P 500 ended nearly flat on Friday as gains in defensive sectors and energy offset weakness in megacap growth stocks, while investors looked toward next week's speech by Federal Reserve Chair Jerome Powell.
Hi VettaFi Voices, we are heading toward the last week of the Q2 earnings season. Now seems like a good time to assess how things have gone so far and what we can expect from next week. Has it been a strong or weak earnings season? And have the reported earnings shown any kind of [...]
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Wall Street's main indexes were mixed and close to unchanged
on Friday as weakness in megacap growth stocks offset gains in
defensive sectors and energy, while investors looked toward next
week's speech by Federal Reserve Chair Jerome Powell.
EV (electric vehicle) titan Tesla (
NASDAQ:TSLA
) is among one of the most-discussed stocks on the social media platform Reddit. While TSLA stock has significantly gained mentions and is buzzing on Reddit, competitive headwinds and pressure on margins continue to pose challenges, limiting the upside potential.
With this backdrop, let’s delve into this trending Reddit stock.
Is Tesla Stock a Buy or Sell?
Given the ongoing challenges, Wall Street analysts remain sidelined on Tesla stock. The stock skyrocketed during the first six months of 2023, led by its record deliveries. However, Tesla is consistently lowering its prices to push volumes amid growing competition, especially in China. The decline in its ASPs (average selling prices) is hurting its industry-leading margins and has not gone down well with investors.
Further, the company’s stock has dropped nearly 27% since it announced its
second-quarter earnings. Tesla’s
adjusted EPS increased 20% year-over-year, but lower ASPs led to a continued decline in its margins. In Q2, TSLA’s GAAP gross margin dropped by 682 basis points year-over-year. Further, it fell over 110 basis points on a quarter-over-quarter basis. In addition, the company’s operating margin decreased by 493 basis points year-over-year.
Tesla CEO
Elon Musk trashed margin concerns. He added short-term variances in margins are “minor relative to the long-term picture.” Further, Musk believes that autonomy will help the company to recoup margins and make margin concerns “look silly.”
While Musk doesn’t see margin pressure as a concern, growing competition has forced Tesla to cut back the prices of vehicles and
launch cheaper models.
All of these concerns have kept analysts on the sidelines. With 10 Buys, 13 Holds, and five Sell recommendations, Tesla stock carries a Hold consensus rating on TipRanks. However, given the recent pullback, the
average TSLA stock price target of $253.77 implies a 17.8% upside potential from current levels.
The Bottom Line
Tesla undoubtedly looks like a solid long-term pick as it continues to outgrow its peers. Further, its leadership in the EV space, focus on cost reduction, new product development, vehicle autonomy, and continuous product improvement should support future growth. However, given the near-term competitive and margin concerns and analysts’ Hold consensus rating, investors should take caution before investing in Tesla stock.
Disclosure
Wall Street's main indexes pared losses on Friday as weakness in megacap growth stocks was countered by gains in defensive sectors and energy firms, while investors looked forward to commentary by Federal Reserve Chair Jerome Powell next week.
It has been about a month since the last earnings report for Tesla (TSLA). Shares have lost about 16.6% in that time frame, underperforming the S&P 500.
A swift sell-off in technology stocks and surge in Treasury yields are punishing Cathie Wood's flagship ARK Innovation ETF, leaving the closely followed fund down more than 20% for the month of August.
What you need to know… The S&P 500 Index ($SPX ) (SPY ) today is down -0.39%, the Dow Jones Industrials Index ($DOWI ) (DIA ) is down -0.17%, and the Nasdaq 100 Index ($IUXX ) (QQQ ) is down -0.58%. Stocks this morning are moderately lower, with the S&P...
Wall Street's main indexes fell on Friday, extending declines to the fourth session on a drag from megacap growth stocks, as evidence of a resilient U.S. economy fanned fears of interest rates staying higher for longer.
Wall Street was set to open lower on Friday after a three-day selloff, with megacap growth stocks among lead decliners, as evidence of a resilient U.S. economy fanned fears of interest rates staying higher for longer.
The NASDAQ 100 Pre-Market Indicator is down -131.78 to 14,584.03. The total Pre-Market volume is currently 36,021,753 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro Short QQQ (SQQQ) is +0.57 at $21.35, with 5,888,068 shares
Below is Validea's guru fundamental report for TESLA INC (TSLA). Of the 22 guru strategies we follow, TSLA rates highest using our P/B Growth Investor model based on the published strategy of Partha Mohanram. This growth model looks for low book-to-market stocks that exhibit cha
U.S. stock index futures fell on Friday after a three-day selloff on Wall Street, as evidence of a resilient U.S. economy spurred fears that the Federal Reserve would hold interest rates for longer than previously expected.
For Immediate Release Chicago, IL – August 18, 2023 – Today, Zacks Investment Ideas feature highlights Chicago Mercantile Exchange CME, Nvidia NVDA, Microsoft MSFT and Tesla TSLA.
U.S. stock index futures edged lower on Friday after a three-day selloff on Wall Street, as evidence of a resilient U.S. economy spurred fears that the Federal Reserve would hold interest rates for longer than previously expected.
The stock market is up strongly this year with the help of multiple tailwinds, including cooling inflation, an easing of Federal Reserve interest rate hikes, and a resilient U.S. economy, among other things. So far in 2023, the S&P 500 index has gained nearly 15%.The Nasdaq C
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