Tesla (TSLA) is the feel-good stock story of the year. Maybe the decade? That might be overstating it. But it's hard not to get caught up in the love-fest surrounding Elon Musk and his company. The stock is up more than 360% in one year.
Yahoo! Finance Senior Columnist Michael Santoli says Wall Street is all in: "I do think it's all about willingness to believe. The market is basically ratifying the whole phenomenon of Tesla. I think it shows that Wall Street needs a hero. Elon Musk is that hero, that innovator, you know, Steve Jobs, P.T. Barnum, all in one package."
Let's reflect on the numbers from the earnings report out after the bell yesterday.
Q2 financial results "shocked" investors. The company reported a second consecutive quarterly profit. Adjusted EPS was $0.20, compared to analysts' expectations of a $0.19 per share loss. Revenue came in at $405 million. The full-year delivery guidance remains at 21,000 cars.
After the results, analysts gushed, for the most part. Adam Jonas at Morgan Stanley raised his price target to $103 and called Tesla 'America's fourth automaker' while Dougherty & Co. Analyst Andrea James raised her target to $200 from $90. However, Goldman Sachs' Analyst Patrick Archambault maintained one of the most bearish 6-month price targets for Tesla on the street -- he raised his target to just $95 from $84. The stock is hovering around $154 this morning.
Related: Tesla CEO Elon Musk's Next Big Thing
While Santoli insists "you can't fundamentally, on a financial basis, justify the stock valuation," he points out that the Tesla phenomenon is bigger than that.
"Clearly it's all about hopes and faith...they aren't selling to people who say 'I want to own an electric car and I think I'm going to choose Tesla' - they want a Tesla."
Watch the video above to see why Santoli thinks the introduction of BMW's new electric car, the i3, will help Tesla.
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