Elon Musk's reaffirmation of full year guidance for Tesla Inc., as Wednesday's announcement of earnings was a disturbing effect on the stock's shares Company Price and the analysts who evaluated the results said: They do not believe him.
"While demand in this quarter has seen an impressive upturn and the company has strong order activity in the third quarter, we continue to believe that repeating the forecast of 360,000 to 400,000 units for the 201
Under his new CFO Telsa
seemed to move away from the aggressive predictions that had caught it in the past in the shareholder letter released late Wednesday. The much shorter letter said the company had "simplified the approach to consulting," as Jeremy Owens of MarketWatch reported.
However, at the later conference call with analysts, Musk immediately reiterated the unit's specific guidance and said the company expects to reach break-even this quarter and be profitable in the next quarter.
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"We do not believe this is likely to model third-quarter deliveries at -10% qoq Quarter back near the level of the second quarter (total 2019 = ~ 339,000), "said RBC analyst Joseph Spak. "As a result, we do not expect sales to increase in the next two quarters compared to the second quarter or year over year. In fact, we do not expect sales to return to the level of the second quarter by the third quarter of 2020. As a result, growth is likely to be disrupted and we do not believe the valuation reflects this, "the analyst wrote His below-average valuation of the stock and the $ 190 price target below the current level.
Analyst Rajvindra Gill also expressed skepticism about the forecast at Needham.
"We are wary of Tesla's ability to achieve these goals, as the ramp-up in the second half will require a significant setback," the analyst wrote in a note. "We are maintaining our underperformance valuation as margins are structurally low, competition is increasing and profitability is not sustainable. "
Tesla's stock reflected pessimism and declined 14% on Thursday, the largest decline since November 2013. The Company posted a loss of $ 408 million or $ 2.31 per share for the quarter compared to a loss of $ 718 million, or $ 4.22 per share, in the year-ago quarter. Sales increased to $ 6.3 billion from $ 4 billion a year ago. Adjusted for one-time effects, Tesla lost $ 1.12 per share, compared to a loss of $ 3.06 per share a year ago. Analysts surveyed by FactSet had expected Tesla to report an adjusted quarterly loss of 35 cents per share on revenue of $ 6.5 billion. The news was particularly disappointing as second-quarter sales earlier this month surpassed Wall Street forecasts and set a record.
Wedbush's Ives lowered its price target from $ 230 to $ 220, maintaining a neutral rating for the stock.
"While demand in this quarter has seen an impressive upturn and the company has strong order activity in the third quarter, we continue to believe that repeating the forecast of 360,000 to 400,000 units for 2019 as a whole was a scratch and a challenging trajectory make this fight an Everest-like climb. "
"Tesla has taken a step in the right direction, with a strong delivery number for the success of Model 3, but the soft gross margin profile will be a hit for the cops, hoping for much needed good news on this front," he wrote a note.
But not all houses were willing to give Musk the benefit of the doubt. Baird's Ben Kallo, a longtime cop, confirmed his above-average stock and price target of $ 355.
"We believe cash in hand ($ 5 billion) and cash generation ($ 614 million) are extremely cheap and should support future growth investments," Kallo wrote in a note. "Investors may focus on soft GAAP margins and the bottom line, although the results were adversely affected by the timing of the loans (automatic gross margin increased by 200 basis points, excluding loans) and other effects on restructuring / exchange rates."
Baird accepted another view of the news about the company's Chief Technology Officer, JB Straubel, moving to a senior consultant position. News that surprised investors and came after a series of high-level outflows.
"We see the succession plan as positive, although Mr Straubel's contribution will be missing," wrote Kallo. Piper Jaffray's Alexander Potter said Straubel is "probably the second most important person at Tesla", and although he continues to hold the status of a "consultant", his departure is likely to unsettle investors. He made no explanation, but his friendly mood showed no dissatisfaction. "
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Potter was also largely optimistic He reiterated his overweight valuation of the stock and described forward-looking metrics as" tipping everything in the right direction " , He reduced his share price target from $ 396 to $ 368.
The Tesla share fell 20.4% in 2019, the S & P 500
has gained 20.5% and the Dow Jones Industrial Average
has gained 16.9%.
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