Street Talk: Tesla Inc (TSLA), Facebook Inc (FB) and QUALCOMM, Inc. (QCOM)

Tesla’s Bullish and Bearish Cases Both Make Sense

Tesla Inc (NASDAQ:TSLA) gets some attention from Citigroup analyst Itay Michaeli, who initiates coverage on the stock with a Neutral rating and a price target of $357, which represents a 9% increase from where the stock is currently trading. (To watch Michaeli’s track record, click here)

Though the analyst may be “fundamentally bullish” on CEO Elon Musk’s electric car giant, he sees just as much reason to be a bear against Tesla as he does to root for the giant’s success. Michaeli believes, “We’re positive on Tesla’s position as a Car of the Future leader and view the upside case to still be significant, however, we prefer to wait for a better entry point either through: (a) A stronger balance sheet, which in our view would more favorably tilt the 12-month risk/reward equation, all-else-equal; or (b) convincing signs of a smooth Model 3 ramp with limited Model S cannibalization.”

Weighing in Tesla’s favor, “On the bull side, the company has had initial product success, brand appeal, speed of innovation and tech/software leadership,” explains the analyst. However, the forthcoming year will be crucial to see whether Tesla’s upcoming mass-market Model 3 launch will help Tesla gain the edge it needs to be the ringleader of the autonomous driving tech-verse.

TipRanks analytics indicate TSLA as a Hold. Out of 18 analysts polled by TipRanks in the last 3 months, 6 are bullish on Tesla stock, 8 remain sidelined, and 4 are bearish on the stock. With a loss potential of roughly 8%, the stock’s consensus target stands at $302.07.

Facebook Merits Price Target Lift on Zooming User and Ad Revenue Growth

With Facebook Inc (NASDAQ:FB) set to post its second-quarter print next Wednesday, Needham analyst Laura Martin is feeling more encouraged than ever on the social media titan, cheering rapid-fire user and advertising revenue growth that continues to outclass her every expectation.

With strong bullish sentiment, ahead of the roll of the earnings dice, the analyst rates a Buy rating on shares of FB while lifting the price target from $165 to $185, which represents a close to 13% increase from where the stock is currently trading. (To watch Martin’s track record, click here)

Martin cheers that “[…] user growth has outpaced our estimates and our channel checks indicate more robust advertising revenue growth than we previously projected owing to more video ads (i.e., higher CPMs), faster Instagram revenue growth, and lower competition from SNAP than we had previously projected. We now believe FB is becoming the de facto near-monopoly mobile choice for brands and direct response (i.e., lead-gen) advertisers.”

For the second quarter, the analyst is upping her revenue expectations 43% year-over-year to $9.18 billion as well as increasing her EPS forecast up 55% year-over-year to $1.09. Additionally, the analyst is boosting estimates for both 2017 as well as 2018, taking revenue for 2017 up 40% year-over-year to $38.56 billion and EPS up 44% year-over year to $4.80; hiking revenue for 2018 up 27% year-over-year to $48.9 billion and EPS up 22% year-over-year to $5.85. However, the analyst notes, “we believe these growth rates are conservative” in a “winner-take-most” digital market-verse where Facebook emerges as the clear “key winner.” For the second quarter, Martin predicts mobile advertising revenue will comprise of around 85% of the titan’s total ad revenue, which would indicate mobile revenue to hit $7.65 billion.

TipRanks analytics show FB as a Strong Buy. Based on 32 analysts polled by TipRanks in the last 3 months, 30 rate a Buy on Facebook stock while 2 maintain a Hold. The 12-month average price target stands at $173.19, marking a nearly 6% upside from where the stock is currently trading.

Qualcomm Still Presents Attractive Long-Term Investment Opportunity

QUALCOMM, Inc. (NASDAQ:QCOM) released its third fiscal quarter results for 2017, leading the chip maker to fall 4% yesterday and another almost 4% today in the market. Particularly, Qualcomm’s licensing business QTL underperformed in a quarter that saw the chip maker battling it out with Apple over licensing revenue.

Though the company’s QTL quarterly revenue shortchanged the expectations of top analyst Michael Walkley at Canaccord, he notes that the company’s core business QCT came in “strong,” and with a prospective NXP deal waiting in the wings for the close of 2017, the analyst reiterates a Buy rating on QCOM with a price target of $70, which represents a 26% increase from where the stock is currently trading. (To watch Walkley’s track record, click here)

Walkley contends, “Despite the lower high margin QTL revenue, overall EPS was stronger than anticipated primarily driven by strength in QCT with a favorable product mix in mobile and strong growth in adjacent market opportunities driving upside […] Despite the licensing disputes with Apple and now likely Samsung, we believe Qualcomm is an attractive investment opportunity for longer-term investors during this time of uncertainty, as we believe Qualcomm will eventually settle their disputes with these two leading smartphone OEMs. We also believe the NXP merger remains on track and will create a company with significant earnings power and cash flow, developing into a clear industry leader in the mobile, IoT, and automotive semiconductor markets backed by an extremely strong combined Qualcomm, NXP (Philips) and Freescale (Motorola) IP portfolio.”

TipRanks analytics exhibit QCOM as a Buy. Out of 18 analysts polled by TipRanks in the last 3 months, 7 are bullish on Qualcomm stock while 11 remain sidelined. With a return potential of 9%, the stock’s consensus target price stands at $61.90.

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