$TSLA STOCK UPDATE

 

SUMMARY

  • Tesla continues to see high volatility with heavy and often erroneous or misleading media coverage
  • I recommend we continue to ride the storm out due to high potential upside

CURRENT FINANCIALS

  • Analyst recommendation 2.3
  • PEG n/a
  • EPS next 5Y n/a
  • Performance   month: -12%, quarter -15%, 6 month -33%, year -20%

NEW MODELS

Model-S P85D

  • Tesla’s new top-of-the-line electric car can be delivered in just 20 days, far shorter than the waiting time on the luxury auto maker’s less expensive designs, suggesting it has shifted production to the $105,000 and up sedan to boost revenue.
  • The P85D represents a potential boost for the company. Lauded for handling that rivals Porsche or Ferrari sports cars, it has an “insane” button that engages two motors to achieve up to 691 horsepower.
  • Production glitches and other factors slowed initial sales of the model, denting fourth quarter results.

Model-X

  • Tesla is expected to offer its next model, a sport-utility vehicle called the Model X, in the third quarter of 2015.

FOURTH QUARTER MISS

  • The company missed its reduced fourth quarter delivery goal by about 300 units.
  • Tesla blamed the miss on orders that couldn’t be delivered because the new owners weren’t available to take delivery during the end-of-year holidays.
  • Tracking Tesla’s sales progress has been challenging, since the company reports deliveries globally and gives those numbers every three months.

DEMAND

  • Wall Street analysts believe there is pent-up demand for Model S sedans. Last month, it said the order backlog included 10,000 deposits for its Model S and 20,000 for the Model X.
  • Tesla has forecast it will sell 55,000 cars globally in 2015, rising to 500,000 in 2020 and more than 2 million by 2025.
  • 2015 is a challenging year for demand (Model S’s 3 third year of U.S. sales, Model X not meaningfully available until late 2015, China not yet a big market). While these demand risks have been driving poor share performance, the reward is very high if Tesla can deliver 45k-50k Model S’s.

CHINA ISSUES

  • Charging emerged as a major challenge for Tesla in China. Many Chinese people tend to live in apartment buildings rather than the single-family homes.
  • Tesla announced it will lay off employees in China amidst its dismal performance – potential buyers in China have expressed concerns about difficulties accessing charging stations.
  • Other electric car manufacturers (Daimler + BYD, BMW, and Audi) are already building, selling, or planning to enter the China market.

GIGAFACTORY

  • TSLA has denied media reports of a delay in the construction of its $5 billion Gigafactory. The electric carmaker declared that the work is going as per schedule.
  • The factory will produce enough battery packs to allow Tesla to build around 500,000 electric cars by 2020. It will also reduce the ‘per kWh’ cost of production of battery packs by over 30%.

http://finviz.com/chart.ashx?t=TSLA&ty=c&ta=1&p=d&s=l

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