Tesla delivers ‘an Aaron Judge-like’ margin performance, says Wedbush

Commenting on Tesla’s (TSLA) quarterly results, Wedbush says the EV maker delivered “an Aaron Judge-like” margin performance vs. Street expectations featuring a 200bps beat on auto gross margin ex credits, which has been a large overhang to the Tesla story looking over the past few quarters. Automotive ex-credits gross margin beat at 17.1% vs. the Street’s 15.1% bogey, which was front and center metric for the Street as this is clearly an indication that Musk & Co is continuing to focus on its profitability side while balancing its plans for the future, Wedbush says. With price cuts fully in the rearview mirror now, the firm views this as a key piece for the Street to exemplify Tesla’s ability to expand its margins as the company continues its AI/FSD transformation over the coming years. Wedbush has an Outperform rating on the shares with a price target of $300.