Stifel Nicolaus analyst Stephen Gengaro slashed Tesla's 12-month price target to $491 from $508 after the company's July earnings stumble. The cut reflects margin pressure and EBITDA weakness that blindsided the street, though Gengaro kept his Buy rating intact.
Tesla shares tanked over 25% in July on second-quarter results that underwhelmed analysts. The stock now trades at $311.21, leaving room for a 57.77% jump if Gengaro's revised forecast holds. That's the carrot dangling in front of investors right now, even as the market digests weaker profitability.
Here's the twist. Tesla delivered record units last quarter, 480,126 vehicles, and beat revenue expectations. But gross profit stalled and adjusted EBITDA came in at $3.27 billion, below what the consensus had penciled in. Gengaro calls this "cautiously positive" because the firm is making real strides on Full Self-Driving and Robotaxi development. The Model YL launch should trigger fresh demand, backed by Tesla's biggest order backlog since 2023.
Street consensus paints modest rebound
The broader Wall Street view is more reserved. Twenty-eight analysts tracked by TipRanks have set an average 12-month target of $382.65, implying a 23% upside from current levels. That's a far cry from a bull stampede. The consensus rating sits at Hold, suggesting most desks expect sideways trading over the next year rather than the fresh rally that would justify chasing the stock here.
Tesla's year-to-date decline of over 30% reflects the market's frustration with margin compression. Investors came for the growth story but found profitability lagging. Gengaro's case hinges on FSD and Robotaxi becoming real revenue drivers, not just engineering exercises. If that timeline slips, the gap between his $491 target and the current $311 price could close the wrong way.
This material is informational only and should not be construed as financial advice or investment guidance.
