‘Egregiously Overvalued:’ Wall Street Divided by Tesla’s Mixed Earnings as One Analyst Expects Shares to Crater

The second-quarter results reported by Elon Musk’s Tesla have sparked a mixed response from Wall Street, with some analysts expressing concerns over the electric vehicle (EV) manufacturer’s slipping margins and others focusing on the company’s strong revenue and earnings numbers. Analyst Craig Irwin called the company “egregiously overvalued” while setting a price target that is more than 70 percent lower than its current share price.

Yahoo News reports that Wall Street analysts have mixed responses to Tesla’s second-quarter results, with some expressing concern over the EV manufacturer’s slipping margins and others focusing on the company’s revenue and earnings beat.

Craig Irwin, a Senior Research Analyst at Roth Capital Partners, has been particularly vocal about his concerns. “I still think Tesla is egregiously overvalued right now,” Irwin stated, maintaining an $85 price target on Tesla’s stock. This suggests a potential downside of a massive 71 percent.

Irwin also hinted at the possibility of further reducing his price target due to various profit challenges Tesla is facing. These challenges range from price cuts to increased investments in AI software and Cybertruck production. “We’re very bearish on Tesla. We think people are much better off looking at many of the other names either in conventional auto manufacturers or some of the emerging players as opportunities for investment,” Irwin added.

Despite the concerns, Tesla’s second-quarter results were not entirely bleak. The company reported sales of $24.9 billion, surpassing analyst forecasts of $24.51 billion. Earnings per share came in at $0.91, beating forecasts of $0.81 and marking a 45 percent increase from the same period a year ago.

However, Tesla’s gross profit margin of 18.2 percent fell short of estimates for 18.8 percent. This figure represents a continued decline from the fourth quarter 2022 peak of 24 percent.

Tesla CEO Elon Musk also expressed uncertainty about the global economy during the earnings conference call. “One day it seems like the world economy is falling apart. And the next day everything’s fine. I don’t know what the hell is going on,” Musk told analysts.

The mixed results led to a drop of more than nine percent in intraday trading on Thursday.

Read more at Yahoo News here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan