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Tesla Stock Surges 9% in Single Day – Is it a Buy?

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Key points

  • Tesla's Q2 2024 production report surpassed expectations, sending its share price soaring
  • Despite this, the automaker's deliveries are still down 4% year-on-year
  • With this mixed picture, we examine whether Tesla stock is a buy right now

Tesla (NASDAQ:TSLA) stock surged some 9% higher on Tuesday as news of better-than-expected production and deliveries halted its recent downward trend.

The news, stemming from the release of Tesla’s much-anticipated production and deliveries report for the second quarter, sent the automaker’s stock up over $230 per share in Tuesday trading.

Tesla is still down 7.8% year-to-date (YTD) and 12.5% over the last 12 months (as of July 2), but Tuesday’s performance provided investors with a welcomed boost.

But can it keep its momentum going? Let’s take a look.

Beating delivery estimates

Analysts’ consensus was that Tesla would deliver 436,000 cars in the second quarter, but the actual numbers came in about 2% higher, with roughly 444,000 deliveries. ‘Deliveries’ equate to cars sold, so this bodes well for Tesla’s second quarter earnings, which are scheduled for release on July 23.

Tesla delivered 422,405 of its Model 3 and Model Y cars, which are its most affordable brands. Meanwhile, its other models saw 21,551 deliveries. Overall, the combined total for deliveries was 443,956 in Q2.

While this was a surprise, the figure is around 4% lower than Q2 2023. However, it is up substantially from Q1, when the EV maker had just 386,810 deliveries, its lowest number since the second quarter of 2022.

Tesla also made more vehicles than expected in the last quarter, producing 410,831 cars. That includes 386,576 Model 3 and Model Ys, and 24,255 for other models.

Is Tesla stock a buy?

Tesla’s production and deliveries report is certainly good news, but is it enough to warrant a buy? The numbers were still 4% below the same quarter a year ago, and that includes price cuts, low-interest financing, and other incentives to spur flagging sales.

Tesla is also seeing increased competition and is losing some market share in an industry that is growing, but at a slower pace.

Another issue is the CEO, Elon Musk, who is a polarizing figure, mostly for his activities outside of Tesla.

A recent poll by market intelligence firm Caliber, as reported by Reuters, said Tesla’s consideration score, which measures consumer interest in a brand, dropped to 31% after Q1, down from 70% in November of 2021.

“It’s very likely that Musk himself is contributing to the reputational downfall,” Caliber CEO Shahar Silbershatz told Reuters earlier this year.

The other problem is Tesla’s valuation is still high, with a P/E ratio of 54 and a forward P/E ratio of 85.

There are too many concerns around Tesla stock, not to mention its inflated price. But keep an eye on the next earnings report for more information on its trajectory.

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Dave Kovaleski
Senior News Writer

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