Tag: Stock pick

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) pioneered long-range electric vehicles (EVs) and for many years benefited from rising demand for its high-end, desirable products. Tesla’s initial strategy focused on a top-down approach, where it developed high-performance, long-range luxury EVs to build the brand’s image and generate capital for the development of more affordable mass-market models. This strategy was very successful and created a strong halo effect around the brand. 

Tesla effectively dominated the U.S. luxury EV market for years, and at one point was even outselling traditional luxury brands like BMW and Mercedes-Benz. If you want to learn more about how Tesla makes money, its financials, and key recent developments with the business, keep reading. 

What does Tesla do?

Tesla designs, manufactures, and sells EVs, along with energy generation and storage systems. It produces a range of electric cars, including the Model S, Model 3, Model X, Model Y, and Cybertruck. It also manufactures the Tesla Semi commercial truck. The company makes clean energy products such as solar panels and solar roof tiles for homes and businesses.

It sells and installs battery energy-storage systems, from home-based units to grid-scale storage systems. Tesla builds and maintains a global network of Superchargers for its electric vehicles and offers home-charging products as well. The company also develops and sells its supervised Full Self-Driving (FSD) technology, an advanced driver-assistance system that still requires active driver readiness.

More recently, management has dealt with a range of challenges, including heightened competition, production shipping delays, declining sales in certain markets, and a drop in profits despite record vehicle deliveries. Tesla is also facing multiple recalls and investigations.

And some investors remain unhappy with the fact that CEO Elon Musk has shifted some of the company’s focus and capital toward artificial intelligence and robotics projects, and recent controversies surrounding Musk’s public comments and political activities have led to protests and calls for Tesla boycotts. Still, its brand recognition and charging infrastructure remain key assets.

How does Tesla make money?

Tesla makes money through the sale of its electric vehicles, which remain its largest revenue source. The company also generates revenue from leasing its vehicles and from servicing and repairing them. Its energy and storage segment develops, manufactures, and sells clean energy products for residential, commercial, and utility-scale use. The segment’s products include the residential Powerwall and large-scale Megapack battery systems.

Tesla has historically earned significant revenue from selling regulatory credits, but as more major automakers develop and sell their own EVs, they may become less reliant on buying credits from Tesla. Changes in government policies could also significantly impact Tesla’s credit revenue in the near future.

The sale of FSD software upgrades for its self-driving technology is a growing source of revenue. In the past, management has also profited from selling Bitcoin, though this is not a consistent revenue stream. While not yet a major revenue source, the company is positioning itself for earnings from a future robotaxi network and other AI-related opportunities it hopes to leverage.

Tesla’s financials

In the third quarter of 2025, the company reported revenue of $28.1 billion, up about 12% year over year. Total automotive revenue rose 6% from one year ago, while energy generation and storage sales skyrocketed by 44%. Free cash flow reached a record high of nearly $4 billion, and the company had nearly $42 billion in cash and investments on its balance sheet, which far exceeded its total debt of about $7.5 billion.

It delivered 497,000 vehicles in the three-month period, which surpassed its own forecasts and analyst estimates and was up 7% from one year ago. Tesla reported particularly strong growth in European deliveries (up 25% year over year) and record deliveries in South Korea, Taiwan, Japan, and Singapore.

However, net income came in at $1.4 billion, a sharp decline of 37% from the previous year and the fourth consecutive quarter of a profit drop. Margins have been squeezed as Tesla has lowered prices to stimulate demand and compete with lower-cost EV makers, while it’s also incurring higher operating expenses for AI and robotics projects. The expiration of the U.S. federal EV tax credit in September is expected to weigh on near-term deliveries and sales in the fourth quarter of 2025 and into 2026.

Recent developments

Tesla is heavily investing in the development of robotaxis and humanoid robots. Its long-term financial success could significantly hinge on the adoption of these technologies, which are still in early stages of development and not yet contributing significant revenue. The company plans to unveil a new version of its general-purpose AI-driven Optimus robot in the first quarter of 2026, with an ambitious goal of building a production line by the end of 2026 capable of producing up to a million units annually.

The robotaxi service, which uses a fleet of FSD-enabled Model 3s and Model Ys (some with a human safety monitor, some without), was launched in Austin, Texas, in June 2025. Musk plans a significant expansion of this fleet by the end of 2025, and is aiming for over 1,500 robotaxis in cities including Austin and the San Francisco Bay Area, with potential launches in Arizona, Nevada, and Florida pending regulatory approval.

The two-seater Cybercab, a vehicle specifically designed for autonomy without a steering wheel or pedals, was unveiled in October 2024 and its mass production is a key part of management’s long-term strategy. It plans to start production of the Cybercab in the second quarter of 2026, but the vehicle’s ultimate release timeline may be affected by factors like self-driving software and regulatory approval.

Tesla has introduced the six-seat Model Y L in China. It features a 2-2-2 seating configuration with second-row captain’s chairs and an overall length and wheelbase longer than the standard Model Y. Deliveries in China began in September 2025, and the variant has been met with strong demand. Production for a U.S. version might start in late 2026, but this has not been confirmed, and the model might never come to North America.

Tesla is also reportedly ramping up work on the second-generation Roadster. Production is still several years away, but the vehicle’s development is progressing, including work on advanced features like the proposed SpaceX package with cold-gas thrusters. The design has been a subject of frequent delays since its initial 2017 unveiling. The most recent estimated time frame for production is around 2027 or later.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post How does Tesla make money? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Rachel Warren has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Tesla. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool Australia has recommended Bayerische Motoren Werke Aktiengesellschaft. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Superloop Ltd (ASX: SLC) and Aussie Broadband Ltd (ASX: ABB) are both Australian telecommunications companies with a lust for growth through acquisitions. Their shares have both seen robust growth over the past 6 months, thanks to solid financial results and expanding customer bases.

At the time of writing, Aussie Broadband shares are in deficit, down 2.82% for the day at $5 a piece. Today’s decline means the shares are now 14.62% lower over the month and 16% lower than their 3.5-year peak in late October. Thanks to huge gains over the past 6 months, Aussie Broadband shares are still 37.98% higher over the year.

Superloop shares are also trading in the red this afternoon. At the time of writing, the shares are 5.17% lower for the day, trading at $2.30 each. The decline has pushed the shares 29.82% lower over the month, but they’re still 11.71% higher over the year, again, mostly owing to strong gains since May.

In a new note to investors this morning, analysts at Macquarie Group Ltd (ASX: MQG) have updated their outlook on the two shares. And there is one clear winner.

Macquarie’s take on Aussie Broadband shares

The broker has lowered its outlook on Aussie Broadband shares to neutral, from outperform. It has also cut its 12-month price target on the stock by 20% to $5.10, from $6.35 previously.

At the time of writing, the revised price target implies a potential 2% upside for investors over the next 12 months.

“Our ABB target price cut of -20% reflects: 1) EPS Change: Revisions of -3% in FY26E, -7% in FY27E, -9% in FY28E…. 2) DCF: Beta increase from 1 to 1.2, reflecting increased potential volatility from pricing changes if OPT/TPG/Vodafone also lower prices, or TLS continues to lower prices further…. 3) PE-Rel Valuation: P/E Multiple used to value the business reduced from 37x NTM P/E to 30x P/E on NTM earnings, which represents a decrease to only +10% above its historical Long-Run Average P/E Relative to the ASX300,” the broker said in its note.

“Our rating change to Neutral reflects a lower TSR (0%), given our target price change.”

Macquarie’s take on Superloop shares

Macquarie analysts have, however, maintained their outperform rating on Superloop shares, putting the telco as the favourite. The target price was also reduced by 7% to $3.30, down from $3.55 previously.

At the time of writing, this represents a potential 43.5% upside for investors over the next 12 months.

“Our SLC target price cut of -7%, reflects: 1) EPS Changes: Our EPS changes (-4% in FY26E & FY27E, -3% in FY28E) reflect a moderation in our estimates for Users growth in SLC’s Consumer business…. 2) DCF: Beta increase from 1.05 to 1.15, reflecting increased potential volatility from competitor pricing moves,” Macquarie analysts explained in the note.

The post Superloop vs Aussie Broadband shares: Which has the strongest upside? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Aussie Broadband. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Steadfast Group Ltd (ASX: SDF) shares are having a tough session on Wednesday.

In afternoon trade, the insurance broker network’s shares are down 5% to $5.10.

Why are Steadfast shares sinking today?

Today’s decline appears to have been driven by the release of a broker note out of Macquarie Group Ltd (ASX: MQG) this morning.

Macquarie has been looking into the industry and highlights that commission rate cuts are accelerating. It said:

Our market analysis has uncovered an accelerating pace of commission rate cuts. Although Home and Personal Motor products are generally not profitable for insurance brokers, as these products are pushed into the direct channel, we are concerned customer retention for Business Package could deteriorate.

In addition, the broker thinks that the weakness in premium rates that Steadfast has been battling could stay for longer than previously expected. It adds:

We now forecast weakness to last longer than the next 12 months, putting pressure on SDF’s ability to hub their wholly owned insurance brokers, which has not necessarily been successful in the past.

This comes at a time when the ASX 200 stock has announced a change of leadership, which is something Macquarie notes can weigh on the performance of a share price. The broker explains:

Our ESG analysts recently reviewed stock price performance for companies undergoing executive changes. 12-month underperformance was witnessed across founder exits, internal replacements and ESG related exits.

Downgraded

In light of the above, this morning Macquarie has downgraded Steadfast shares to a neutral rating (from outperform) and slashed its valuation to $4.90 (from $7.00). This is a touch below where its shares are currently trading.

Commenting on its downgrade and new valuation, the broker said:

Downgrade to Neutral (from Outperform). As commission rates fall and the premium rate cycle threatens to be softer for longer, we downgrade our recommendation to Neutral (from Outperform).

Valuation methodology change: In addition to changing our PERel/DCF methodology to PERel only as the premium cycle slows, we now incorporate a 25% discount reflecting: #1) heightened regulatory attention for Strata, ACCC M&A intervention; ASIC insider trading investigation; #2) increased weight applied to cost-out as the premium rate cycle slows, something which has not been successful in the past; and #3) long term succession risk of the Group CEO at the same time as the CFO and Chair have exited.

The post Why are Steadfast shares sinking 5% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Steadfast Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and Steadfast Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is up a slender 0.05% in early afternoon trade, but it’s not getting any help from these three ASX 200 stocks that are all plumbing 52-week-plus lows today.

Here’s what’s happening.

ASX 200 stocks sinking to 52-week-plus lows

The first company trading at one-year lows today is News Corp (ASX: NWS).

Shares in the diversified media conglomerate are down 0.3% at the time of writing, trading for $44.10. That’s the lowest price since early November last year, with News Corp shares having closed in the red for the previous six trading days.

That selling follows a positive response to the ASX 200 stock’s first-quarter (Q1 FY 2025) update, released on 7 November.

News Corp shares closed up 3% on the day, with the company reporting a 2% increase in revenue for the quarter to US$2.14 billion. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were up 5% to US$340 million.

Moving on to the second ASX 200 stock plumbing to one-year lows, we have Guzman Y Gomez (ASX: GYG).

Shares in the Mexican fast-food restaurant chain are down 4.2% at the time of writing, changing hands for $22 apiece. That’s certainly unwelcome news to shareholders. Though not to the raft of short-sellers betting against the stock. Guzman Y Gomez shares are the sixth most shorted on the ASX this week, with a short interest of 11.8%.

Guzman Y Gomez began trading on the ASX on 20 June 2024, and shares are now at the lowest level since the company listed.

Which brings us to…

Also plunging to new all-time lows

The third ASX 200 stock marking new 52-week plus lows is TPG Telecom Ltd (ASX: TPG).

Shares in Australia’s third-largest telecommunications company are down 4% in afternoon trade today, at $3.65 each, after exiting Monday’s trading halt. That marks a new all-time low for the stock.

TPG Telecom shares are under pressure today after the company announced it had raised $300 million through an Institutional Reinvestment Plan. TPG issued about 83 million new shares for $3.61 each. That’s a 5% discount to last Friday’s closing price of $3.81.

Speaking of last Friday, the ASX 200 stock closed down a precipitous 31.1% on the day.

However, as the Motley Fool’s James Mickleboro noted on the day, the sell-down wasn’t nearly as tough for existing shareholders as you might think.

That’s because TPG Telecom traded ex-dividend on Friday for an outsized capital return. That was comprised of a $1.52 per share capital reduction and a 9-cent per share unfranked dividend.

That saw investors achieve a whopping 28.8% yield relative to the previous day’s closing price.

The post 3 ASX 200 stocks plumbing 52-week lows today appeared first on The Motley Fool Australia.

More reading

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• Why are TPG Telecom shares in a trading halt today?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.