Elon Musk's repeat of year-round delivery forecasts for Tesla Inc. when revenue reporting Wednesday had a cool effect on the company's share price and analysts whose weighted results had To say this: They don't believe him.
"Although demand showed an impressive return this quarter and the company sees strong order activity for the third quarter, we continue to believe that the repetition of 360,000 to 400,000 unit guidance for the full year 201
Under his new finance manager, Telsa
appeared to move from the aggressive forecasts that have captured it earlier in the shareholder letter released late on Wednesday. The letter which was much shorter than usual, said the company "simplified the approach to guidance," as MarketWatch's Jeremy Owens reported.
But on the later conference call with analysts, Musk immediately reiterated the specific device guide and said the company expects to be broken in this quarter and profitably next.
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"We do not believe this is likely and model deliveries from the third quarter -10% q / q, with the fourth quarter return near the level in the second quarter (total 2019 = ~ 339k), says RBC analyst Joseph Spak. "As a result, we do not believe the next two quarters will grow revenues either from the second quarter or on an annual basis. In fact, we do not see revenues returning to levels in the second quarter of the third quarter of 2020. So growth is likely to be in the hiatus and we do not believe that the valuation reflects this, "wrote the analyst while adhering to his underperformance rating on the stock and $ 190 rate targets below the current level.
At Needham, analyst Rajvindra Gill was also skeptical of the guidance.
" We are cautious about Tesla's ability to meet these goals when the ramp requires a significant second half snapback, "the analyst wrote in a note." We maintain our underperformance rating due to structurally low margins, accelerated competition, and lack of sustained profitability. " Tesla's share reflected pessimism, slipping 14% Thursday to mark its biggest one-day percentage decline since nove mber 2013. The company had 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, a year earlier. Sales rose to $ 6.3 billion, against $ 4 billion a year ago. Adjusted for disposable items, Tesla lost $ 1.12 per share, compared to a loss of $ 3.06 per share a year ago.
Analysts asked by FactSet had expected Tesla to report an adjusted quarterly loss of 35 cents per share on sales of $ 6.5 billion. The news was particularly disappointing after sales figures in the second quarter earlier this month peaked on Wall Street's forecasts and set records.
Wedbush's Ives cut their price target to $ 220 from $ 230 and maintained a neutral rating on the stock.
"Although demand showed an impressive return this quarter and the company sees strong order activity for the third quarter, we continue to believe that the repetition of 360 to 400,000 unit guidance for the full year 2019 was a head scraper since pure math and demand paths make this an Everest-like uphill. "
"Tesla took a step in the right direction with a strong delivery number on Model 3 success, but the soft gross margin profile will be a stomach punch for the bulls hoping for much needed good news on this front," he wrote in a note.
But not all houses were unwilling to give Musk the benefit of the doubt. Baird's Ben Kallo, a long-standing bull, reiterated his better stock and price target performance estimate of $ 355. "Cash balance figures ($ 5B) and cash generation ($ 614M) were, in our view, extremely favorable and should support future growth investments. "Kallo wrote in a note. "Investors can focus on soft GAAP margins and bottom line, but results were adversely affected by the timing of credits (auto gross margin expanded in succession ~ 200 bps in order, excluding credit) and other consequences of restructuring / exchange rates."
Baird took a different view of the news of the transition to the company's technology manager JB Straubel into a senior adviser role, news that surprised investors and comes after a number of high-level departures.
"We see the success plan positive, although Straubel's contribution will be missed," wrote Kallo.
Alexander Potter of Piper Jaffray said that Straubel is "probably the second most important person on Tesla," and although he retains "adviser" status, his retirement is still likely to rattle investors. He gave no explanation, but his friendly mood did not suggest any dissatisfaction. "
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Potter also took a broadly Haussian view and repeated his overweight on the stock and described forward-looking calculations as" all trends in the right direction. "He trimmed the stock price to $ 368 from $ 396.
The Tesla shares fell 20.4% in 2019, while the S&P 500
received 20.5% and Dow Jones industrial average
has received 16.9%.
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