Tesla Q2 results: CFRA analyst says the stock is a ‘buy’ here

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Tesla Inc (NASDAQ: TSLA) shares are volatile in extended trading after the leading U.S. electric cars manufacturer reported a 42% annualised growth in revenue that still came in shy of Street estimates.

Tesla Q2 results: a brief recap

Earned $2.3 billion versus the year-ago figure of $1.1 billionPer-share earnings of $1.95 were sharply above last year’s $1.02Adjusted for nonrecurring items, EPS came in at $2.27Revenue jumped to $16.9 billion from $12 billion in Q2 of 2021Consensus was for $1.81 of adjusted EPS on $17.1 billion in salesAutomotive regulatory credits brought in $344 million; down 3.0% YoY

Earlier this month, Tesla reported an 18% sequential decline in its quarterly deliveries.

What else was noteworthy?

At 27.9%, automotive gross margin was down both sequentially and on a year-over-year basis. Tesla blames supply constraints, China (COVID shutdown) and higher production costs for the weakness.

It also sold 75% of bitcoin holdings in Q2 for a $564 million loss. On CNBC’s “Closing Bell”, Garrett Nelson – Senior Analyst at CFRA Research said:

Q2 presented some unique challenges. But their June production was the strongest in company history. So, looking at the long-term opportunity, we’re buyers. We think investors will do very well in a year, three years, five years down the road by buying Tesla around these levels.

Last month, CEO Elon Musk said Tesla will cut 10% of its salaried workforce. The stock is down more than 35% for the year.

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