Why Tesla stock jumped 32.5% in July
Actions of You’re here (NASDAQ: TSLA) rose 32.5% in July, according to data from S&P Global Market Intelligence. The stock climbed on broad market momentum, favorable analyst coverage and higher earnings in the fourth quarter.
The share may also benefit from expectations that the company will be added to the S&P 500 index, which could push up the share price through the inclusion of stocks in popular index funds. Tesla has climbed nearly 250% year-to-date, making the company one of the best large-cap companies of the year and by far the largest automaker in the world.
Tesla released its fourth quarter results on July 22, posting results well above market expectations. The electric vehicle company reported revenue of $ 6.04 billion and earnings per share of $ 0.50, while the average analyst estimate predicted a loss of $ 0.82 per share on $ 5.15 billion . However, a JP Morgan analyst noted that 87% of the company’s operating profit in the quarter came from higher-than-expected regulatory credit sales and that this revenue stream could not necessarily be considered in the future. .
Oppenheimer analyst Colin Rusch then issued a stock rating on July 23, maintaining an “outperformance” rating on the company and increasing its one-year price target on the stock to $ 968 by share at $ 2,209. Wedbush analyst Daniel Ives released a note on Tesla the same day, raising the company’s price target from $ 1,250 to $ 1,800 and setting an upper-level target on the company’s shares of $ 2,500.
Tesla now has a market cap of around $ 271 billion. In comparison, Ford is valued at $ 27 billion and General Motors pretty much the same.
Tesla stock continued to rise in early August. The company’s share price has risen around 1.5% in the month so far.
Tesla’s valuation remains highly controversial, with some analysts citing the company’s transformational potential in the auto and energy markets as reasons the stock may rise, while more bearish views on the The company cite the fact that it only recorded its first year of profitability on a GAAP basis and that its sales are significantly lower than those of its competitors, including Ford and GM.
Tesla is due to host a presentation showcasing its new battery technology on September 15, an event that is sure to garner a lot of attention and coverage from analysts and investors. The company is valued at around 160 times the expected earnings this year and 9 times the expected sales.
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