Tesla Just Had a Toyota-Sized Meltdown—JPMorgan, UBS Raise Red Flags

Tesla’s second-quarter results gave investors multiple reasons to hit the sell button. While revenue topped Wall Street estimates, adjusted earnings of 33 cents per share fell well short of expectations as automotive margins deteriorated. Gross margin slipped below analyst forecasts, highlighting continued pressure on Tesla’s core vehicle business even as deliveries improved.

But the bigger surprise came below the income statement. Tesla reported negative free cash flow for the first time in more than two years after capital expenditures more than doubled to roughly $5.8 b.