The stock is down $22.55 (-7.02%) at $298.53.
From ZeroHedge:
One day after Tesla announced its worst quarter in history, in which it burned a record $1.4 billion in cash..
... Goldman has guaranteed it will not be an
underwriter on the next Tesla stock offering - which at the current cash
burn will take place in less than 2 quarter - by reiterating its Sell
rating on Tesla, and cutting its Price Target to $205, or 36% downside.
Here is the summary from Goldman's David Tamberrino who once again
unapologetically throws up all over the latest TSLA earnings:
We
reiterate our Sell rating on shares of TSLA. We believe the stock
should continue to de-rate following 3Q17 results where the company
further pushed out its Model 3 production targets for 5k/week to late
1Q18. We believe this further pushes out the potential to ramp
to 10k/week production of the Model 3 to at least 2019 (though we
continue to model a ramp well below both); this should weigh on gross
margins through at least 1Q18 and we do not expect a return to above 20%
Automotive gross margin levels until 2H18. Altogether, we believe this
indicates that the company’s goal for positive OCF generation should
remain elusive until the middle of 2018 — though we still forecast
significant FCF burn. On that front, we now believe TSLA will need to
raise capital sooner (2Q18 vs. 3Q18 previously). Lastly, we believe the
company’s comments on potential China production (3 years out) will be
disappointing to investors, which have been confident in TSLA entering
the China market with local production in the next one to two years. Our
6-month price target declines to $205, showing 36% downside.
And some more details:
3Q17 results weaker than expected, Model 3 production targets pushed out
TSLA reported a weaker than expected quarter, with an adjusted EBITDA
loss of $22mn vs. GSe of $145mn and FactSet consensus of $175mn.
Overall, higher operating expenses than expected drove the miss. More
importantly, the company pushed out expectations for its 5k/week
production target for the Model 3. Altogether, we lower our estimates
and believe that Street consensus figures similarly need to be tempered
given lower gross margin guidance and a pushed out cadence to Model 3
production.
Key points — to the negative:
- Model 3 production target for 5k/week has been pushed out to late 1Q18: Previously
the company had targeted late 4Q17, and appeared about one month behind
in October when it announced 3Q17 deliveries. However, due to battery
pack module issues, this ramp appears pushed out further to the end of
1Q18. That said, the company believes it can exit 4Q17 above 1k/week in
production (with comments suggesting potential to be in the 1,000s per
week production range).
- 10k/week Model 3 production now looks pushed to 2019: While
this is very much undetermined – as the company needs to get to 5k/week
before it can determine where to add capital in order to speed up or
duplicate its lines, we believe the company has softly pushed its
10k/week production target into 2019 from “at some point in 2018”
previously.
- New product cadence could be pushed out: The
company has previously communicated that new product development costs
are largely contingent upon internal cash generation from the Model 3.
Future product launches include (1) the Tesla Semi (reveal date of
11/16), (2) the Model Y –a crossover based on the Model 3 platform, (3) a
pickup truck, and (4) the second generation roadster. We see the
timeline for these products as likely pushed out as (1) the Model 3
remains a drag on cash flow generation from a slower ramp, and (2) the
company allocates resources on ramping Model 3 production.....
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MUCH MORE
