Tesla (NASDAQ: TSLA) stock dropped during pre-market trading on Wednesday, even though Baird analysts became optimistic about the EV giant ahead of Q2 earnings.
Baird analysts have reaffirmed their positive outlook on Tesla (NASDAQ: TSLA) shares, maintaining an Outperform rating. The firm cited a favorable outlook ahead of the electric vehicle (EV) maker’s Q2 earnings report next week.
In their recent note, Baird analysts wrote,
“We are buyers of the stock ahead of Q2 EPS.”
The analysts expressed confidence in Tesla’s performance for the quarter, citing several key factors. They highlighted a more stable pricing environment, increased revenue from the full self-driving (FSD) segment, and anticipated strength in the Energy Segment as contributing to a potentially strong quarter.
All Eyes on Robotaxi Event
Baird analysts are particularly interested in the forthcoming Robotaxi event, which they consider a significant catalyst for Tesla stock. They anticipate that this event will clarify the financial implications of the Robotaxi product and establish a framework for its potential deployment. Analysts expect Tesla to first launch its own Robotaxi fleet in specific cities as the initial phase of its rollout.
They said in a note,
“We think there will be limited revenue in 2025 but think the rollout will be a positive catalyst for the stock. We think a broader rollout to consumers is a longer-term offering, but note the speed of improvement in Full-Self Driving is improving at a quicker rate.”
Additionally, Baird analysts view the unveiling of Tesla’s next-generation platform as an immediate boost for the company’s shares.
They point out that postponing the Robotaxi event from August 8 to October has led to speculation that Tesla may reveal a new vehicle or vehicles on this platform. Recent statements from CEO Elon Musk are also aligning with this perspective.
The timing of the launch coincides with the planned commencement of production in early 2025. Baird expects Tesla to produce 25,000 next-generation vehicles in 2025.
The equity research firm expects Tesla to beat Q2 earnings per share (EPS) estimates and corporate gross margin.
Specifically, the analysts forecast earnings per share to come in at $0.62, slightly above the consensus estimate of $0.61. They anticipate a gross margin of 18.5%, compared to the consensus estimate of 17.5%. However, Baird’s revenue estimate for Q2 stands at $23.6 billion, slightly below the consensus of $24.3 billion
Tesla (NASDAQ: TSLA) Stock Movement
As of 09:01 a.m. (Eastern Time) Wednesday, TSLA stock traded at $250.76, marking a 2.26% decrease compared to the previous trading session.
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