Starlink, a satellite internet division of Elon Musk’s privately held company SpaceX, is growing rapidly. However, a Wall Street Journal report demonstrated that the company fell short of its financial targets.
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According to the report, Starlink delivered revenues of $1.4 billion in 2022, much higher than the $222 million reported in the prior year. However, it came in well below the company’s target of $12 billion. Starlink signed up customers, but not as quickly as the company expected. Nonetheless, the company is focusing on improving its profitability and the speed of its internet, which bodes well for future growth.
Speaking at the World Satellite Business Week conference, SpaceX’s Vice President of Starlink Commercial Sales, Jonathan Hofeller, said the company is no longer subsidizing its satellite antennas. The move will alleviate pressure on margins and help improve profitability.
Earlier, SpaceX teamed up with Cloudflare (NYSE:NET), an internet solutions and cloud-based cybersecurity service provider, to enhance Starlink’s performance. While SpaceX is improving Starlink’s network speed, it has also turned profitable, which is encouraging. Overall, the aerospace and satellite internet company is heading in the right direction and has helped Elon Musk raise cash for his other endeavors. At the same time, shares of Musk’s golden child, Tesla (NASDAQ:TSLA), have more than doubled year-to-date.
As Tesla has outperformed the broader market, let’s look at what the Street projects for the stock.
Is Tesla a Good Long-Term Stock?
UBS analyst Patrick Hummel believes Tesla is poised to grow in the long term. However, given the recent rally in its price, Hummel suggests investors to wait for a better entry point. Moreover, Tesla’s focus on accelerating volume growth by lowering vehicle prices has weighed on its margins, keeping analysts sidelined.
Including Hummel, Tesla stock has received 12 Hold recommendations. The stock also sports 12 Buy ratings and has five Sell recommendations.
Based on the recommendations, Tesla stock has a Hold consensus rating on TipRanks. Analysts’ average price target of $272.50 is roughly in line with its closing price on September 13.
