GLJ Research Maintains Tesla’s $19.05 PT and Sell Rating
GLJ Research analyst Gordon Johnson reiterated a Sell rating and $19.05 price target on Tesla.
“Tesla 2Q25 Earnings Preview – We See Results Coming in Largely In line Due to Bitcoin Gain + Aggressive FSD Revenue Recognition Offsetting Neg.
FOREX Hit + Margin Slashing Rate Buy-Downs. Tesla 2Q25E Earnings Preview.
In this note, we adjust our 2Q25E TSLA model after our review of: (a) our expectation for an increase in gross profit/car sold QoQ as other cars sold saw price increases (i.e., +$5K for all Model S/X variants) as did some TSLA model 3/Y variants, (b) the negative QoQ margin impact from rate buy-downs, (c) the positive QoQ impact from higher incremental capacity utilization, (d) the QoQ benefit from OPEX capitalization, (e) incrementally more credit revenues QoQ, (f) the large negative QoQ FOREX impact (due to the fall in t he value of the Renminbi), (g) the ~$290mn QoQ positive impact from the gain in the price of Bitcoin, and (h) what we believe will be a record recognition of 100% margin FSD revenue.
In what follows, we highlight the impacts to our model from these changes, as well as what we expect in 2H25E and 2026E.
After Many Changes to Our 2Q25E Model, We Expect Largely In Line Figures.
Summarily, relying mainly on our 1Q25A-to-2Q25E earnings bridge analysis (Ex.
1), we see TSLA’s 2Q25E rev/non-GAAP EPS due out later today coming in at $22.3bn/$0.39 (Consensus $22.6bn/$0.42), or largely in line with Consensus.
Moreover, we expect further improvement in TSLA’s fundamentals in 3Q25E ahead of the $7.5K U.S.
EV tax credit ending exiting Sep.-month end (as well as the fact that Q3 is, by far, the seasonally strongest quarter for U.S. auto sales – Ex.
2), or revs/non-GAAP EPS of $23.9bn/$0.46, which is below Consensus’ $24.9bn/$0.51 ests.
Then, in 4Q25E, we expect TSLA’s fundamentals to col lapse, with revs/gross margin/non-GAAP EPS of $22.3bn/14.2%/$0.34, materially below Consensus’ ests. of $26.8bn/16.2%/$0.59, due to both the end of the EV tax credit, as well as a dated product lineup (and intense competition from Chinese/U.S./European automakers).
Then, and what we expect will spook long-only TSLA investors (mutual funds + pension funds + state treasurers + etc.), we see TSLA’s free-cash-flow (“FCF”) turning negative in 4Q25E for the first time since 1Q24A – and for just the second time since 1Q20 (Ex.
3).
For a company trading at 178.4x its 2025E non-GAAP EPS (as TSLA currently is) – meaning the market expects TSLA to pay it, as a dividend, 100% of its 2025E EPS in each of the next 178yrs – negative FCF is usually the straw that breaks the camel’s back with respect to the smart money’s willingness to “stay put”.”
This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.
