Investor's Corner
Tesla stock (TSLA) one week after Q2 2016 Report
Post Q2 Report Action
As we previously reported, the Q2 quarterly results were “mixed”:
- Revenue matched expectation, a positive for Wall Street;
- Earning losses were higher than anticipated, a negative, but for a company like Tesla, where the stock price is based on future expectations, the earning numbers are really not what counts;
- Slightly increasing gross margins, a positive;
- Practically zero ZEV credits for the quarter, a negative;
- Production and demand on track to support 50,000 deliveries in 2H 2016, a positive;
- Lower production numbers than previously anticipated, a negative.
When you have such a mix of positives and negatives, it is fairly normal for traders to have a “subdued” response, unlike the usually wild responses to results that are big misses or big beats on expectations.
Accordingly, this time around the technical response of the stock market to last week’s Tesla Q2 2016 report has been “muted.” The stock has been in “compression” (a horizontal back and forth) since the report, staying in the $225-$230 range, but overall 12-month Analyst Price Targets have actually decreased with the average dropping from $277 to $244.
Looking at more details of the reactions to the report, this is a small sample from Top Analysts, noting that none of them changed their position.
Alexander Potter of Piper Jaffray says “Teslas untouchable brand helps investors look past million-dollar losses.”
“It’s hard to recommend a cash-burning company with such an uncertain outlook,” said Potter, who reiterated a neutral rating and $223 price target on the stock. But consumers and investors still seem captivated by Tesla’s products, said Potter. And as long as the company “retains this aura,” its stock multiple will “probably stay buoyant,” he said.
Brad Erickson of Pacific Crest says “The risks still outweigh the rewards.”
“Brad rattled off a number of challenges Tesla still needs to tackle in a note to clients. But he reiterated a sector weight rating on the stock, said Tesla’s cash burn wasn’t as bad as expected during the quarter, and maintained the belief that the company’s longer-term vision is “second to none.”
Ben Kallo of Robert W. Baird says “Focus [is] on Tesla (TSLA) Production Ramp and Long Term Goals, Not Q2 Miss.”
Kallo commented, “Q2 revenue was in line with our estimate, but TSLA missed on EPS with higher-than-expected OPEX. Additionally, gross margin missed consensus estimates and was pressured during the quarter with the Model S refresh and X ramp, but automotive gross margin improved sequentially, which was better than we expected. Importantly, TSLA reaffirmed its 2H:16 delivery target of ~50k vehicles, expects margins to ramp in 2H:16 given higher manufacturing efficiency, and the Model 3 remains on track for 2H:17 production.”
Kallo also covers SolarCity (SCTY) and he commented that “Although SCTY has a 45-day go-shop period which could provide additional upside, we believe it is highly likely the TSLA and SCTY merger will go through, and we are moving to the sidelines.”
Colin Rusch of Oppenheimer “noted that Tesla appears to be taking on increasing responsibility when it comes to technology development.”
“Rusch wasn’t surprised by Tesla’s quarter, and the firm remains on the sidelines until Tesla can show some progress toward profitability. It also appears to have taken a hard line with suppliers on timelines, pricing and allocation of resources,” he explained. “While we see potential benefits, we note increasing risk on supplier pushback.”
Ryan Brinkman of J.P. Morgan noted that “JPMorgan cuts Tesla estimates on higher operating expenses.”
“To reflect lower revenue and higher operating expenses following the company’s Q2 results, Brinkman cut his 2016 earnings per share estimate for Tesla to (32c) from $1.60. The analyst notes his 2016 earnings estimate was $4.62 a year ago and $2.74 at the start of this year. This reflects the “degree of consistent ratcheting down of near-term earnings,” Brinkman tells investors in a post-earnings research note. The analyst keeps an Underweight rating on Tesla with a $180 price target.”
Shelby Seyrafi of FBN Securities “reiterated a Buy rating on Tesla Motors (NASDAQ: TSLA), with a price target of $275.”
Seyrafi is a 3-star analyst with an average return of 0.5% and a 51.5% success rate. Seyrafi covers the Technology sector, focusing on stocks such as Hewlett Packard Enterprise, Dot Hill Systems Corp., and Concur Technologies.
Colin Langan of UBS, says “Tesla, SolarCity synergies still cloudy.”
“Colin noted Tesla announced details of its agreement to acquire SolarCity (SCTY) and provided synergy targets with the deal. UBS said they remain cautious on the deal given the lack of compelling synergies and the fact the deal is an unneeded distraction for Tesla management, which already faces challenges with its Model 3 launch and production targets. UBS maintained its Sell rating and $160 price target on Tesla shares.”
The overall consensus of analysts covering Tesl Motors, reported at tipranks.com, is neutral (hold).
Source: TipRanks
Trade Analysis
Quarterly Reports are usually the catalyst that start or stop actions for swing traders. The Q2 report was no different. I called for a bullish swing trade when the MACD crossed to the bulls on July 1st. The trade closed on August 4th when the MACD crossed to the bears, the day after the Q2 report was released. This was a good trade that gained over $14 in about a month period to traders that went long on the stock (see the shaded band in the chart below). For option traders this was a “fabulous” trade.
A week after the report the market is undecided on what to do with TSLA in the short term. All indicators are “neutral”: the stock has gone sideways for a week; the MACD averages are flat and overlapping; the MACD itself is at zero; both the 50-day moving average (the red line in the chart below) and the 200-day moving average (the yellow line in the chart below) are flat. All of these indicators are showing the absence of a trend. Trading in these conditions is not advisable and fairly risky. I’m personally out of trading TSLA until a trend appears.
Source: Wall Street I/O
In a new interview on Wednesday, Tesla uber bull Ron Baron said that anyone looking to buy the company’s stock should do so as soon as they can.
Baron, founder and CEO of Baron Capital and one of Tesla’s most persistent institutional bulls, used a CNBC Squawk Box appearance on Wednesday to deliver a familiar message with fresh urgency: In his opinion, Tesla stock is a buy:
“The time to buy the stock is now. FSD is catching on, and it’s going to be bigger and bigger. 55% of new buyers are buying it (Teslas) with FSD. It’s going to be everywhere. It’s safer.”
The Baron Capital frontman’s case is built around Full Self-Driving. Tesla reported 1.48 million active FSD subscriptions in the second quarter, up 56 percent year over year, and company officials have said roughly 55 percent of new North American deliveries left with a subscription enabled.
Baron framed that attach rate as proof the product is moving from enthusiast extra to default expectation, and as a reason software, not just vehicle volume, should drive the next phase of value.
His conviction on Tesla shares is not theoretical, as Baron Capital made its first Tesla investment in 2014, after years of meetings that began around the 2010 IPO roadshow. The firm later built a large SpaceX position starting in 2017.
Ron Baron today in new interview on Tesla:
“The time to buy the stock is now. FSD is catching on, and it’s going to be bigger and bigger. 55% of new buyers are buying it (Teslas) with FSD. It’s going to be everywhere. It’s safer.” pic.twitter.com/Rv5PB0bVZ2
— Sawyer Merritt (@SawyerMerritt) September 16, 2026
Baron said those Musk-led bets have generated about $30 billion of the $71 billion in profits Baron Capital has produced for clients. He put the firm’s current exposure at roughly $25 billion in SpaceX and $5 billion in Tesla. Personally, he described SpaceX as his largest holding, at about $5 billion, with about $1.5 billion in Tesla and additional Tesla exposure through the firm’s funds.
That concentration is also a statement of loyalty. Asked about talk of a SpaceX-Tesla combination, Baron said he had already walked Elon Musk through arguments for and against a deal, then declined to repeat them on air. His public position was simpler: “Whatever you decide is better is what I’m going to support,” he said to Musk.
Baron also said that he picked up the farewell edition of the Model S after Tesla decided to sunset the vehicle earlier this year, calling it his favorite car he’s ever driven.
Elon Musk
Elon Musk gives his most telling Tesla-SpaceX merger conversation yet
Elon Musk hinted a Tesla-SpaceX merger could be coming, and Wall Street is taking notice.
Elon Musk gave his clearest signal yet that Tesla and SpaceX could eventually combine, telling the All-In Summit in Los Angeles that the two companies’ deepening collaboration makes the question worth asking. Sawyer Merritt first surfaced the highlight on X Tuesday.
Asked directly why Tesla and SpaceX remain separate given how closely they already work together, Musk told hosts at the summit: “Great question there. With all this collaboration, on so many levels, who can imagine what action one might take when there’s so much close collaboration in so many areas.” SpaceX President Gwynne Shotwell, who joined Musk on stage, added that SpaceX personnel have already moved into xAI to fill leadership and engineering gaps, saying the businesses are integrating “faster than I thought,” though “not fully integrated yet,”
The comments landed on top of merger speculation that has been building on Wall Street for months. JPMorgan has called a tie-up “strategically coherent on paper,” pointing to overlapping ambitions in AI, robotics, energy, transportation and space. Jefferies went further, estimating Musk could retain roughly 55.3 percent voting control in a deal structured without a premium, a scenario that would still leave room for Tesla shareholders to come out ahead. On Kalshi, traders now put the odds of a merger before 2028 at 66 percent.
Tesla’s stake in SpaceX, still under one percent, traces back to its earlier investment in xAI, which converted to SpaceX equity after SpaceX absorbed the AI company. The two are also jointly building Terafab, a chip facility in Austin meant to serve both Tesla’s AI computing needs and SpaceX’s satellite ambitions. Wedbush analyst Dan Ives has stood by a 2027 merger timeline for months, and Cathie Wood’s ARK Invest recently floated a similar case, an idea Musk pushed back on directly at the time.
Another Tesla SpaceX merger prediction by ARK Invest has Elon Musk talking
The timing adds another layer. Tesla has scheduled an October 1 unveiling for its next generation Roadster at a venue near SpaceX’s McGregor, Texas test site, using the phrase “Go for launch” in its promotional material. Both stocks dipped roughly 2 percent Monday before recovering slightly in premarket trading Tuesday, with SpaceX shares up about 0.4 percent and Tesla essentially flat.
Musk stopped short of confirming anything is in motion. But unlike his past denials of a corporate restructuring, this response didn’t rule one out, and it came with Shotwell sitting next to him describing an integration that’s already underway.
Elon Musk
Tesla Cybercabs narrowly miss deadly Amazon cargo plane crash
An Amazon cargo plane crash near Miami’s airport stopped feet from dozens of Tesla Cybercabs.
An Amazon Prime Air Boeing 767 cargo jet overran the runway at Miami International Airport on Sunday afternoon, killing five people and injuring five more. The jet, operated by North Carolina based carrier 21 Air as Flight 7598, touched down around 2 p.m. after arriving from San Juan, Puerto Rico, then crossed the airport perimeter, plowed across NW 67th Avenue and struck multiple vehicles before catching fire, according to the Associated Press.
Photos and video from the scene show the aircraft’s nose stopped within meters of a fenced staging lot holding dozens of gold painted Tesla Cybercabs, the steering wheel free robotaxi Tesla began putting on public roads in Austin last week. Miami-Dade Fire Rescue has confirmed the plane struck “multiple vehicles” but has not said whether any Cybercabs were among them, and neither Tesla nor airport officials have addressed the fleet directly.
The Cybercabs had not yet entered commercial service in Miami. Tesla’s existing Robotaxi operation there runs on modified Model Y vehicles and has been unsupervised since Ashok Elluswamy confirmed the detail on X in July.
Footage of the plane crash from earlier today | #ONLYinDADE pic.twitter.com/iGoOtnd6cD
— ONLY in DADE (@ONLYinDADE) September 6, 2026
Elon Musk offered the briefest of reactions. Replying to a Zero Hedge post about the Cybercabs sitting so close to the wreckage, he wrote a single word: “Weird.” He has not commented further, and Tesla has not issued a statement.
The timing puts Tesla’s newest vehicle near an unrelated but highly visible tragedy just days after its Austin debut, a launch that had already drawn scrutiny from federal regulators. The National Highway Traffic Safety Administration opened an audit how Tesla certified the Cybercab as compliant with federal vehicle safety standards, a process Teslarati covered after the vehicle’s September 3 launch event. That inquiry concerns the car’s lack of a steering wheel and pedals, not the Miami crash.
Investigators from the FAA and NTSB are focused on the plane, not the parking lot beside it. Flight data reviewed by outlets including Simple Flying show the 767 touched down around 170 knots, well above the 135 to 140 knot range typical for the aircraft, though investigators have not determined a cause. Amazon said it is working with authorities and that its priority is the safety of everyone affected.
Whether any Cybercabs were damaged, and what Tesla plans for the fleet parked near one of the country’s busiest airports, remain open questions.
NHTSA just escalated its Tesla Cybercab investigation in a big way
Tesla uber bull Ron Baron says ‘the time to buy the stock is now’
