Tesla Inc (TSLA) Has Not Shaken Off Ghosts of Execution Trip-Ups and Model 3 Production Ramp-Up Delays; Ivan Feinseth Remains Cautious
Tigress' Ivan Feinseth boils down his neutral case to various challenges Tesla still faces that keep the analyst on the sidelines.
Tigress analyst Ivan Feinseth looks at a struggling electric car giant when he sees Tesla Inc (NASDAQ:TSLA), out with a note of caution on the company’s ghosts of execution challenges that continue to haunt right along with Model 3 production ramp-up pushbacks. Consider that this is a company who failed to meet its 1,500-vehicle production target, tripping up on supply chain bottlenecks.
As such, the analyst reiterates a Neutral rating on TSLA stock without listing a price target. (To watch Feinseth’s track record, click here)
“Business Performance and profitability continues to be constrained due to ongoing R&D expenses and production ramp-up costs,” warns the analyst, who likewise finds the company’s short-term opportunity hinges upon CEO Elon Musk’s ability to keep boosting funds: “TSLA’s near-term success remains dependent on its favorable access to capital.”
Overall, “Investor expectations have been based on TSLA’s Model 3 to help it evolve from a niche car producer to a competitive automobile manufacturer. High R&D costs together with significant capital expenditures needed to ramp up production continue to push TSLA’s potential profitability a long way off. TSLA’s strong brand equity and quality product offering are outweighed by its execution risk and production delays. TSLA’s ongoing need for additional capital continues to create a significant level of uncertainty around its current valuation. Long-term, TSLA has the potential to become a leading ZEV (Zero Emission Vehicle) manufacturer and clean energy generation provider. Near-term uncertainty, production difficulties, and capital needs keep us neutral on the stock,” Feinseth concludes, noting that the company’s new semi-truck hangs in the balance as the future driver of Tesla’s gains.
TipRanks points to a Wall Street majority that backs Feinseth’s sidelined perspective on the electric car empire, leaning towards the bearish camp. Out of 23 analysts polled in the last 3 months, 5 are bullish on Tesla stock, 9 remain sidelined, and 9 are bearish on the stock. With a loss potential of 2%, the stock’s consensus target price stands at $318.38.