Tesla is expected to report its second-quarter results next Wednesday, with strong sales and revenue numbers expected.
The company delivered 466,000 vehicles in the second quarter, well above Wall Street’s forecast of 450,000 vehicles.
According to Argus Research analyst Bill Celeskey said market surveillance.
In the first quarter, Tesla offered lucrative discounts in China in an effort to gain market share. The lack of such discounts in the second quarter may indicate that the “price war” between electric vehicle manufacturers is slowing down.
“We see more upside in stocks over the next 12 months, and we think the likelihood of the company reaching its production target of 1.8 million units is now more likely than ever,” Celeski says.
Tesla is expected to report revenue of $24.3 billion in the second quarter, up more than 40 percent compared to $16.9 billion in the second quarter of 2022.
Despite increased competition in the short term, Tesla is expected to continue as an “industry leader” for a long time, Celeski continues.
The company has also achieved a reduction in debt levels, which may have a positive impact on Tesla’s financial condition. The company’s net long-term debt was $1.3 billion in March, down from $1.6 billion at the end of 2022.
“The lower debt gives the company the financial flexibility to take advantage of growth opportunities,” says fund manager at Zacks Investment Management Brian Mulberry.
However, it is not a given that everything will go smoothly for Tesla.
The company faces many risks in terms of increased capital expenditure and R&D spending, as well as increased competition.
“Tesla has plans to increase capacity, produce batteries, and improve supercharger infrastructure, which will likely drive up costs, as we’ve already seen,” Mulberry continues.
The electric car giant has, among other things, entered into cooperation with several auto manufacturers, such as Ford Motor Co. And General Motors to open supercharger charging stations for owners of electric cars from other car companies.
“We expect research and development costs to increase by about 26 percent this year, which is likely to impact margins,” Mulberry told the paper.
Tesla shares are up 117 percent so far this year, compared to a 15 percent increase in the S&P 500.
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