Top25-SA-Banner
Benjamin Rosen

About the Author Benjamin Rosen

Ben Rosen, originally from Pittsburgh, PA, is an upcoming sophomore at the University of Michigan's Ross School of Business. He is focusing on finance, banking, and the economy.

Enough Talk of Privatization; How Well is Tesla’s (TSLA) Performance Actually Aligning with Its Q3 Goals?


At some point during the Street’s and the media’s repeatedly becoming obsessed in whether or not Elon Musk will reach his latest ambitious goal, the Tesla (NASDAQ:TSLA) CEO decided he had had enough. For the first time, Musk’s bellyful of public pressure seemed to be to much for him to swallow, and he has since introduced the idea of making his company private. This concept has taken Wall Street by storm for over a week now, but while analysts are focusing on the CEO’s next move, many of them are failing to consider the bigger picture: how is the tech leader performing this quarter relative to how Musk anticipated it would?

Unfortunately for TSLA, the answer to that question is not well. Top-rated blogger Bill Maurer, (ranked #79 out of 6,596 bloggers on TipRanks), dives into Tesla’s Q3 production and competition, including the numbers it’s on pace to achieve as well as its concerns for the near future. From both an internal and external point of view, Maurer expresses looming caution over EV titan, indicating that “it seems Elon Musk’s grand plan could all be a giant distraction to hide more failures.”

With respect to Tesla and no one else, production rates are not meeting predicted levels. In the 11 countries that manufacture Models S and X, delivery rates have decreased in a whopping 9 of them compared to where they were one year ago today. Additionally, plenty of worry has come from the drop off in Norwegian deliveries alone; the 81 combined vehicles fall far short of the 210 registered at this point in 2017, which is very troubling considering the fact that Tesla was Norway’s most popular car brand last December. Maurer acknowledges that guidance is calling for “second half deliveries of the S/X to be up this year over last overall” but sees little capability for TSLA to pull off this feat with respect to its current production rates.

As if its internal struggles were not enough of an issue, Tesla is also facing more electric vehicle competition than ever before. Both the Jaguar I-Pace and the Hyundai Kona continue to gain popularity throughout European markets, posing a great threat to Model X/3 registrations in the continent. Furthermore, Maurer highlights the company’s lack of promise on the domestic front. Audi plans to unveil its E-tron design in less than a month, which will only provide Tesla with another competitor that has access to the US tax credit on EVs. The blogger emphasizes that “usually by now, deliveries would have been set for either the next quarter or perhaps ‘late September’, implying that demand isn’t exactly off the charts.” Thus, Maurer’s thought arose, “Is the Model 3 starting to cannibalize US sales of the S?” Tesla’s questions continue to linger, and the answers have yet to be found.

Wall Street believes Maurer is smart to play it safe when it comes to the electric car giant’s prospects ahead, as TipRanks analytics reveal TSLA as a Hold. Out of 25 analysts polled in the last 3 months, 10 are bullish on Tesla stock, 7 remain sidelined, while 8 are bearish on the stock. With a loss potential of nearly 4%, the stock’s consensus target price stands at $320.85.

 

Investment Strategy: The Daily Insider

We discovered a huge alpha between an insider transaction and the market’s reaction to it. After back testing millions of insider transactions, we were sure of this model’s performance. Interestingly, our daily long picks managed to return profits even in bear markets. To learn more about some of our best trading tips in Smarter Analyst’s Daily Insider newsletter click here.