Tesla Inc (NASDAQ:TSLA), probably the most-loved/hated stock on the market, released third-quarter earnings today after the bell. The electric car giant reported a loss of $3.70 per share on revenue of $2.98 billion. That compares to Wall Street’s expectations of a loss of $2.29 and revenue of $2.95 billion.
CEO and co-founder Elon Musk has loudly and repeatedly promised total production of 500,000 vehicles in 2018, with 400,000 of them Model 3s. Investors’ faith in him has been a large reason for Tesla stock’s outperformance this year, which is up 50% so far this year. However, investors didn’t like what they saw and sent TSLA shares down nearly 4% to $308 in after-hours trading Wednesday.
In Q3, we delivered the 250,000th Tesla. This is a significant milestone as the Tesla fleet is now about 100 times larger than it was five years ago, just before the launch of Model S.
During Q3, we received record net orders for Model S and Model X, setting the stage for what should be an all-time record for deliveries of these vehicles in Q4. With the addition of Model 3 as a compelling, high-performance and long-range electric vehicle that is also affordable, the Tesla fleet should grow even faster in the years ahead.
Shifting road transportation from internal combustion engines to electric powertrains is only half the Tesla story. We are also experiencing growing demand for our Powerwall and Powerpack energy storage products for residential and commercial applications, and we are increasing production of these products. Energy generation with Solar Roof will become a bigger portion of our business next year as we ramp production at Gigafactory 2 in Buffalo. Sustainable energy generation and storage is a critical part of Tesla’s mission and will drive long-term revenue growth and profits.
Q3’17 Update Letter
On the ratings front, Tesla stock has been the subject of a number of recent research reports. In a report released yesterday, Nomura analyst Romit Shah maintained a Buy rating on TSLA, with a price target of $500, which implies an upside of 50% from current levels. On the other hand, on Monday, Evercore ISI’s George Galliers downgraded the stock to Hold.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Romit Shah and George Galliers have a yearly average return of 17.9% and 32% respectively. Shah has a success rate of 64% and is ranked #188 out of 4699 analysts, while Galliers has a success rate of 67% and is ranked #1533.
Sentiment on the street is mostly bearish on TSLA stock. Out of 22 analysts who cover the stock, 9 suggest a Sell rating , 8 suggest a Hold and 5 recommend to Buy the stock. The 12-month average price target assigned to the stock is $318, which represents a slight downside potential from current levels.