Tesla Inc.’s first-quarter earnings and accompanying call with analysts was “one of (the) top debacles we have ever seen,” according to one longtime Tesla...
Tesla Inc.’s first-quarter earnings and accompanying call with analysts was “one of top debacles we have ever seen,” according to one longtime Tesla bull, who said Thursday he was throwing in the white towel and dropping his buy rating on the stock.
Tesla late Wednesday posted a wider-than-expected first-quarter adjusted loss and missed revenue forecasts, although Wall Street appeared to zero in initially on promises that company executives made during their call with analysts, including that the car maker would be profitable again this year. “In our 20 years of covering tech stocks on the Street we view this quarter as one of top debacles we have ever seen while Musk & Co. in an episode out of the Twilight Zone act as if demand and profitability will magically return to the Tesla story.” Daniel Ives, analyst, Wedbush The stock wavered between gains and losses in the extended session Wednesday, but took a dive Thursday of more than 4%.
“While 2Q deliveries guidance appears potentially aggressive, the full year outlook for 360-400K implies a further roughly +35% to +45% sequential increase from 1H19 to 2H19, further highlighting the execution risk entailed in meeting the figures that are implied needed to generate positive earnings and cash flow,” said Brinkman.RBC analyst Joseph Spak said the numbers were “uglier than expected” and agreed a capital raise looks likely.
“Although logistical challenges—long with lower transaction prices—had an obvious impact on Q1 profitability, we think this was temporary,” analyst Alexander Potter wrote in a note. “Guidance implies a second-half recovery for both deliveries and margins, and this seems reasonable to us. Analysts at Deutsche Bank said first quarter was a weak start of the year but results should improve in the coming quarters as Model 3 deliveries increase. The analysts, led by Emmanuel Rosner, did cut their price target on the stock by $10 to $280 and trimmed some estimates to account for weaker margins, they said.
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