Tesla (TSLA): Another Bull Bites the Dust


Tesla (TSLA) is making headlines yet again! And not in a good way.

The electric carmaker’s reporting of first-quarter production and delivery numbers Wednesday night sent the stock plummeting. While deliveries were up 110% (compared to this time last year) to 63,000 cars, this is down 31% since last quarter. Production didn’t do much better — Wall Street was expecting more than 84,000 vehicles in the quarter, compared to the actual 77,100, or a 45% decrease compared to last year. One positive note is Model 3 production, which rose to a record 62,950 vehicles, though still lower than Wall Street estimates.

Despite the challenges and hurdles to overcome, Wedbush analyst Daniel Ives remain bullish on the longer term outlook for Tesla. As such, the analyst reiterates an Outperform rating on TSLA stock, though lowers his price target to $365 from $390. (To watch Ives’ track record, click here)

Though Ives has historically been bullish on Tesla (the analyst reiterated his Buy rating 14 time on the stock over the past year, according to TipRanks analysis), even he concedes “this was a disappointing performance by Tesla as the company missed the Street’s delivery numbers by ~13%.” But looking at the positive side, Ives says “the important bright spot that the bulls could hang their hat on is the all-important Model 3 number was within the area code of Street expectations and will be front and center…as slightly ‘better than feared.’”

Looking at the Model S and X, Ives says “demand/production essentially fell off a cliff as Tesla had a train wreck quarter on this front as it appears in some ways the company is almost sun setting these models with all the focus from both the company and customers on Model 3 demand and future versions (Model Y).” As per the release, combined Model S and Y production fell 45% since last year.

While Wednesday night’s announcement wasn’t what many investors were looking for, Ives believes it is important that “the company reiterated its delivery guidance of 360k-400k for the year [and] it appears the US order pipeline has strengthened over the last month…” However, the analyst does admit that “overall delivery numbers cannot be sugar coated and were a mini logistics/overall debacle in our opinion.”

TipRanks analysis of 23 analyst illustrates the polarization on Tesla’s stock; nine analysts Buying, five saying Hold and another nine recommending Sell. The average price target among these analysts stand at $319.21, which represents nearly 16% upside from current levels.(See TSLA’s price targets and analyst ratings on TipRanks)

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