Tesla’s Q2 was better than expected, this analyst says

In a July 24 report, Roth Capital Markets analyst Craig Irwin reiterated a “Buy” rating on Tesla (Tesla Stock Quote, Chart, News, Analysts, Financials NASDAQ:TSLA) and maintained a $395 price target, citing better-than-expected second-quarter results and steady progress on vehicle and robotics programs. He said the 15.0% non-GAAP auto gross margin, which beat consensus by 140 basis points, was a key highlight.

Tesla reported Q2 2025 revenue of $22.5-billion and adjusted EPS of $0.40, roughly in line with consensus but slightly below Roth’s estimates of $23.6-billion and $0.41. Non-GAAP auto gross margins came in strong at 15.0%, ahead of Roth’s 11.8% and consensus at 13.6%. Regulatory credits added $439-million, contributing about $0.12 to pre-tax EPS. A $284-million bitcoin gain also boosted results, while $300-million in tariffs, split between auto and energy, had only a modest impact but are expected to worsen in the second half.

“Guide unchanged with limited detail, other than Tesla could transition through a few rough quarters,” Irwin said. “Management cited impacts from shifting trade and fiscal policies as elevating uncertainty for 2025 deliveries. We believe volumes from the new China Model Y L and initial low-cost vehicle volumes could support upside versus consensus expectations, and we will monitor closely.”

Irwin said Tesla’s messaging around AI dominance, robotics, and vehicle expansion supports its long-term positioning. Optimus v3 is expected to begin ramping in 2026, with 1 million units targeted within five years. Q2 adjusted auto margins rose to 15.0%, boosted by new Model Y pricing, despite tariff headwinds. Tesla is progressing on new vehicle launches, including a low-cost model, a new Model Y for North America and India, and reaffirmed 2026 launches for the Cybercab and Semi.

“We reiterate our $395 target using a 12.5x revenue multiple on 2026 Estimates,” he said. “Tesla is a large-cap company that often trades like an emerging growth company. Catalysts will play a primary role in valuation, in our opinion, as investors discount the longer-term served opportunity and projected earnings power. We see abundant positive catalysts, and we would be buyers on any weakness.”

-30-