Needham analyst Rajvindra Gill downgraded Tesla (NASDAQ: TSLA) to Sell today. The company’s shares closed yesterday at $323.85.
Gill said:
“We are downgrading Hold as we believe the stock is still overvalued despite falling 16% from its June 2017 peak (the S&P 500 is up 15% over the same 56-week period). Our bearish stance assumes: 1) slower sales of Model S/X on increased competition, possible cannibalization from Model 3 and expiration of credits; 2) slower gross margin improvement for Model 3 based on persistently high manufacturing costs, namely low yields; 3) negative impact to gross margin as ZEV credits decline in 2019; 4) lower energy revenue given the recent restructuring and lastly 5) an unsustainable capital structure with a projected $6BN FCF burn through 2020 and a $1.486BN note due in 2019.”
According to TipRanks.com, Gill is a top 100 analyst with an average return of 21.2% and a 69.1% success rate. Gill covers the Consumer Goods sector, focusing on stocks such as Everspin Technologies Inc, Smart Global Holdings Inc, and Adesto Technologies Corp.
Currently, the analyst consensus on Tesla is a Hold with an average price target of $305.44, which is a -5.7% downside from current levels. In a report issued on July 11, Merrill Lynch also maintained a Sell rating on the stock with a $180 price target.
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Based on Tesla’s latest earnings release for the quarter ending March 31, the company reported a quarterly GAAP net loss of $710 million. In comparison, last year the company had a GAAP net loss of $336 million.
Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of TSLA in relation to earlier this year. Most recently, in May 2018, Antonio Gracias, a Director at TSLA bought 16,666 shares for a total of $473,814.
TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.
Tesla, Inc. engages in the design, development, manufacture, and sale of fully electric vehicles, energy generation and storage systems. It also provides vehicle service centers, supercharger station, and self-driving capability. The firm operates through Automotive, and Energy Generation and Storage segments.
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