With the recent drop in TSLA stock and now below 300, anyone suggested to buy now? I see this stock hitting $450-500 in future?? Let's hear what some expert financial person thinking is? Time to buy or will continue to go lower?
TSLA stock buy or stay away?
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Tesla, Inc.
Cash Concerns Emerge Again with Model 3 Delay
Cash burn accelerates in Q3 as Model 3 is delayed
Q3 pretax income missed cons. & our est. (see FR). The release highlights Model 3 ramp
& FCF challenges; however the stock is trading down only 5% pre-market. Q3 FCF was
-$1.3bn (-$1.4bn ex coll. borrowing) worse than -$1.1bn in Q2 and 70% of the recent
debt issuance. TSLA also guided to lower Q4 margins, implying similar Q4 cash burn
(UBSe -$0.8bn). TSLA ended the quarter with $3.5bn in cash, but at the current burn
rate would be below its $1bn op cash target in two quarters. TSLA also indicated that
capex could be flat in 2018 vs. our prior forecast decline following the Model 3 ramp.
Capex for a plant in China is not anticipated until 2019 (likely ~200k capacity for
regional demand). We see additional capital needs to deliver Model Y by late 2019
(~$3-6bn Gigafactory/assembly plant) in addition to the cash needed to expand its
dealerships & charging stations. We remain cautious on EPS & cash burn, and see rising
risks from increased competition (most luxury OEMs are launching EVs in 2018-20).
Model 3 delay along with Model S & X pressure
TSLA delayed the Model 3 ramp to 5k/week from ending Q4 to ending Q1. This also
resulted in Model 3 target margins for Q4 falling from positive to breakeven, though
TSLA expects to hit its long term 25% margin target. TSLA pointed to the battery
module as the primary bottleneck. In addition, the Model S/X margins fell q/q attributed
to one-time time price adjustments, negative mix, select model price cuts, and added
content. TSLA has targeted 30% margins on these models, though Q3 margins were
18.7% (also impacted by Model 3). This adds to the Model 3 ramp pressure as the
Model S/X are the main source for company profits and FCF.
Lowering 2017-18 EPS and remain below consensus
We are lowering our 2017 EPS est. from -$6.40 to -$8.85 to reflect the Q3 miss and
the weak Q4 margin outlook. TSLA guided to Q4 auto margins of 15%, down from
18.7% in Q3. We are also lowering our 2018 EPS from -$3.30 to -$4.00 to reflect
weaker H1 margins with the slower Model 3 ramp. We are maintaining our 2019-21
estimates. Note our revised 2018 & 2019 estimate are below current consensus.
Valuation: Reiterate Sell rating and $185 price target
We are maintaining our $185 DCF based price target.
Equities
Americas
Automobile Manufacturers
12-month rating Sell
12m price target US$185.00
Price US$321.08
RIC: TSLA.O BBG: TSLA US
Trading data and key metrics
52-wk range US$385.00-181.45
Market cap. US$42.4bn
Shares o/s 132m (COM)
Free float 72%
Avg. daily volume ('000) 5,755
Avg. daily value (m) US$2,011.2
Common s/h equity (12/17E) US$4.19bn
P/BV (12/17E) 12.7x
Net debt / EBITDA (12/17E) 22.5x
EPS (UBS, diluted) (US$)
12/17E
From To % ch Cons.
Q1 (1.33) (1.33) NM (1.33)
Q2 (1.33) (1.33) NM (1.33)
Q3E (2.20) (2.92) NM (2.28)
Q4E (1.53) (3.23) NM (1.74)
12/17E (6.40) (8.85) NM (6.69)
12/18E (3.30) (4.00) NM (2.17)
12/19E (1.00) (1.00) NM 6.12
Colin Langan, CFA
Analyst
colin.langan@ubs
Just one opinion, and you know the old saying, opinions are like A--holes, everyone has one!!!
Honestly I’d rather buy chipotle then Tesla. But that’s me and i’m No expert or else I would have bought Facebook and Paypal years ago... the market is supposed to level out or so they say in the next few years so keep that in mind if it does. As some say you need to be in it for the long hull.
You should not take my advice, however it’s an opinion. I am not short nor long Tesla.
You should not take my advice, however it’s an opinion. I am not short nor long Tesla.
With the impending EV incentives possibly being removed by the GOP tax plan I'd hold off.
If you are trying to make a return that beats the market, then no, I wouldn't advise buying ANY individual stocks. Instead, buy a low-cost mutual fund from Vanguard/Fidelity, take what return the market gives you, and invest for the long-term.
If you are treating this like a trip to a casino, then by all means go for it!
What's your opinion on cryptocurrency? I am thinking of jumping in on Ether....
As an investment or as a way to hide your transactions and money :smile:?
Ethereum claims to use the same blockchain technology as Bitcoin and their description of the differences relative to Bitcoin does seem a bit like advertising hype. As an investment, the change in value of crypto currencies is just way too volatile for my liking. The value of Bitcoin has gone from around $2000 Cdn about a year ago to around $12,000 with no apparent fundamental reason for the valuation other than what that is what people appear to be willing to pay for it. It makes the supposed bubble associated with the greater Vancouver housing market look rather anemic. There have been various description's of crypto currencies as Ponzi schemes and Pyramid schemes; however, Ponzi certainly implies fraud and I don't think there has been any mis representation of what the crypto currency is. I like the description provided by a law professor who described it as more like a case of 'collective delusion'.
Bre-X had a significantly less bubbly valuation, in 7 years going from $0.30 a share (1989) at the time of its IPO to around $286 Cdn (1996) before the toilet got flushed. In the last 7 years Bitcoin went from somewhere around $0.10 to $12,000 making Bre-X look like a plonker. Bre-X was a definite fraud because the investors were promised something (gold) that didn't exist. Bitcoin is perfect because nobody is promising anything so it can't be fraud - right? However, the frothy nature of the Bitcoin valuation does seem to make it subject to manipulation. I seem to recall something last September about J. Dimon from J P Morgan Chase calling Bitcoin a fraud and then going out and buying a bunch of Bitcoins for its clients. I recall that a hedge fund operator filed a market abuse complaint against JP Morgan because of the alleged manipulation.
If you feel the need to invest, I am thinking about setting up the OldGuy cryptic currency. Buy in early and I will send you regular valuation reports from my new offices in Panama.
From AutoWeek Daily Drive
"Tesla is burning through $8,000 a minute as Model 3 production crawls along, report says
Automaker is spending $1 billion per quarter, needs another $2 billion by mid-2018
November 27, 2017
Read more: http://autoweek.com/article/green-c...company-8000-minute-report-says#ixzz4zkroqcns
Tesla CEO Elon Musk fully predicted the "production hell" the company would endure this year, signaling months earlier it would be a make-or-break moment for the electric automaker. But a full five months after production began, the Model 3 is a little difficult to spot even in EV-heavy areas of California.
The details surrounding Model 3 production delays remain a little murky: Battery assembly and steel welding were named as the main culprits by Tesla. The bottlenecks that have been holding up production for the last several months, at last report, appear to persist, and the company has taken the step of pushing back its production targets by a full three months to the end of March 2018. Tesla hoped to have ramped up production of its first truly volume car to 5,000 units per week by December 2017, but by the end of November has achieved a total production output numbering in the high hundreds, according to several reports.
These delays do not mean a lot of free time for Tesla workers; Bloomberg estimates that, despite the low Model 3 output, the company has been burning $480,000 an hour over the past 12 months, which works out to $8,000 a minute.
Tesla embarked on a cash-raising blitz earlier in the spring, accumulating some $3.2 billion ahead of the start of Model 3 production. But the company expected to be generating $175 million per week by December 2017 by producing (and selling) 5,000 Model 3s each week, taking the $35,000 base price at face value. Production delays now portend a significant cash crunch for the automaker -- Tesla has reportedly spent about half of the $3.2 billion in cash that it had saved up specifically for Model 3 production needs and is estimated to have spent $1.4 billion in the third quarter of 2017 alone.
Bloomberg now estimates that, at the current rate of cash burn, Tesla will exhaust its current cash reserves during the first week of August 2018.
A partial solution may arrive via sales of future vehicles that have not yet entered production, which is something Tesla is being criticized for once again, not without merit. Tesla unveiled the second-generation Roadster prototype to crowds gathered to watch the debut of the Semi truck, announcing that it will take deposits of $250,000 now for a "Founders Series" Roadster slated to enter production in 2020. This amount alone, with production for the Founders Series capped at 1,000 units, could generate $250 million, though the company is burning through $1 billion per quarter, as Bloomberg points out.
How much does Tesla need to stay afloat through the middle of 2018? Bloomberg estimates the automaker will require at least $2 billion in fresh capital by that point in time, based on a $1-billion-per-quarter cash burn estimate.
Bloomberg points out that Tesla could shore up the extra cash via a bond sale, even though buyers of debt are not making out very well at the moment after purchasing $1.8 billion earlier in the spring of 2017. Investors remain underwater even after the bonds recovered from a low of 93.88 cents on the dollar earlier in November.
Another option, short of a miraculous release of all production bottlenecks in the month of December, would be to sell more equity -- not the best course since it would dilute existing shareholders.
It remains to be seen if Tesla will be able to achieve the promised 5,000-cars-per-week target by late March 2018. Even though it is not running out of cash at the moment, it may run low on investor patience and brand enthusiasm unless things start heading in the right direction in the next three months."
Read more: http://autoweek.com/article/green-c...company-8000-minute-report-says#ixzz4zkrfe92B
"Tesla is burning through $8,000 a minute as Model 3 production crawls along, report says
Automaker is spending $1 billion per quarter, needs another $2 billion by mid-2018
November 27, 2017
Read more: http://autoweek.com/article/green-c...company-8000-minute-report-says#ixzz4zkroqcns
Tesla CEO Elon Musk fully predicted the "production hell" the company would endure this year, signaling months earlier it would be a make-or-break moment for the electric automaker. But a full five months after production began, the Model 3 is a little difficult to spot even in EV-heavy areas of California.
The details surrounding Model 3 production delays remain a little murky: Battery assembly and steel welding were named as the main culprits by Tesla. The bottlenecks that have been holding up production for the last several months, at last report, appear to persist, and the company has taken the step of pushing back its production targets by a full three months to the end of March 2018. Tesla hoped to have ramped up production of its first truly volume car to 5,000 units per week by December 2017, but by the end of November has achieved a total production output numbering in the high hundreds, according to several reports.
These delays do not mean a lot of free time for Tesla workers; Bloomberg estimates that, despite the low Model 3 output, the company has been burning $480,000 an hour over the past 12 months, which works out to $8,000 a minute.
Tesla embarked on a cash-raising blitz earlier in the spring, accumulating some $3.2 billion ahead of the start of Model 3 production. But the company expected to be generating $175 million per week by December 2017 by producing (and selling) 5,000 Model 3s each week, taking the $35,000 base price at face value. Production delays now portend a significant cash crunch for the automaker -- Tesla has reportedly spent about half of the $3.2 billion in cash that it had saved up specifically for Model 3 production needs and is estimated to have spent $1.4 billion in the third quarter of 2017 alone.
Bloomberg now estimates that, at the current rate of cash burn, Tesla will exhaust its current cash reserves during the first week of August 2018.
A partial solution may arrive via sales of future vehicles that have not yet entered production, which is something Tesla is being criticized for once again, not without merit. Tesla unveiled the second-generation Roadster prototype to crowds gathered to watch the debut of the Semi truck, announcing that it will take deposits of $250,000 now for a "Founders Series" Roadster slated to enter production in 2020. This amount alone, with production for the Founders Series capped at 1,000 units, could generate $250 million, though the company is burning through $1 billion per quarter, as Bloomberg points out.
How much does Tesla need to stay afloat through the middle of 2018? Bloomberg estimates the automaker will require at least $2 billion in fresh capital by that point in time, based on a $1-billion-per-quarter cash burn estimate.
Bloomberg points out that Tesla could shore up the extra cash via a bond sale, even though buyers of debt are not making out very well at the moment after purchasing $1.8 billion earlier in the spring of 2017. Investors remain underwater even after the bonds recovered from a low of 93.88 cents on the dollar earlier in November.
Another option, short of a miraculous release of all production bottlenecks in the month of December, would be to sell more equity -- not the best course since it would dilute existing shareholders.
It remains to be seen if Tesla will be able to achieve the promised 5,000-cars-per-week target by late March 2018. Even though it is not running out of cash at the moment, it may run low on investor patience and brand enthusiasm unless things start heading in the right direction in the next three months."
Read more: http://autoweek.com/article/green-c...company-8000-minute-report-says#ixzz4zkrfe92B
I was thinking of buying one or two for shits and giggles haha
Isn't Ether trading somewhere around $400 - $500 US? If so, you have a higher 'shits and giggles' expense tolerance than me:smile:. You should have bought yesterday or the day before. There was a general devaluation of the crypto currencies of about 20%. I don't know whether there has been a subsequent recovery.
Perhaps you might excuse my pessimism, but living around the Motor City now for 37 years one becomes jaded to auto manufacturers' promises. From AutoExtremist:
Date: Monday, November 20, 2017 at 01:13PM
By Peter M. DeLorenzo
Detroit. The script has become predictable. In what is now a staged “love-in” ritual more aligned with old-time tent preachers than anything else, the Supreme Leader of All that is Righteous and Holy in Silicon Valley descends from the mountaintop and bestows his wisdom and visionary brilliance to a frenzied crowd filled with his salivating disciples and adoring acolytes.
Spewing his usual thought balloons filled with promises and boasts unburdened by reality, St. Elon Musk is The Master, orchestrating The Show to End All Shows, a wondrously self-indulgent and unbridled display of hubris and obfuscation designed to distract all in attendance from the High-Octane Truth about what’s really going on at the automotive cult known as “Tesla.”
Except it was apparent to everyone who still had the ability for rational thought – or at least those who hadn’t had the custom-designed - and fantastic!- Muskian chip embedded in their brains – that Musk was attempting the oldest trick in the con man’s handbook, which is to distract, deny and deter from the real issue at hand. But this was far more egregious than that “pay no attention to that man behind the curtain” scene at the end of The Wizard of Oz; this was out-and-out calculated fraud on the grandest of scales.
The Bright New Automotive Future as promised by Musk and embodied in the Tesla automobile is a canard that has been a failed enterprise from the very beginning. Ruthlessly unprofitable and racking up debt at a prodigious rate, Elon Musk has conned Wall Street and the holier-than-thous in the greener-than-thou enclaves of The New Enlightened to believe that he – through his Magic Pony, aka Tesla – is the solution to all societal ills and if only the rest of the automotive universe would simply cease and desist the world would be a decidedly much better place, free and unfettered by the dismal dullards who make up the defunct remnants of the failed U.S. automotive industry.
Needless to say, if any current automaker, or automotive supplier, or any corporate entity in America for that matter had conducted itself like Tesla, Wall Street would have moved decisively to bury the offending company while branding it as a criminal affront to the tenets of free enterprise.
Instead, we have the enablers on Wall Street completely flummoxed by Musk, jacking up the stock while relentlessly praising his “vision,” conveniently ignoring the fact that Tesla builds $100,000 vehicles fraught with consistent, serious quality problems, and that the much-ballyhooed Model 3 – St. Elon’s promise of a mainstream, “affordable” Tesla that would doom Detroit with a resounding thud of certainty – has been an abject failure that is apparently unbuildable at anything approaching the promised $35,000 “loss leader” pricing or the fanciful boast of 500,000 per-year volumes. (Actually, that number is sheer lunacy. The real number will be lucky to reach 20 percent of that total, in three years.)
So, with his company about to go down, and the promise of the Model 3 finally making Tesla a respected automaker lying in pieces on the ground, what does St. Elon, this country’s resident con man, do? He holds a séance for the Muskian Faithful to introduce a Class 8 all-electric semi-truck – without an existing national infrastructure to support it (although Musk insists he will take care of that with a network of “megachargers”) – that will “transform the industry!” because, well, you know, everything Musk touches is transformative, didn’t you get the memo?
And if that wasn’t enough, Musk plans on introducing a super sports car in 2020, which will be, in Musk’s words, “… the fastest production car ever made - period.” And, Musk being Musk, he just had to add, “The point of doing this is to give a hard-core smackdown to gasoline cars.” I’m not even going to bother regurgitating the details of this car because they’re completely irrelevant.
The net-net of this charade? The truck is a pipe dream, and frankly, other vehicle manufacturers will probably beat Musk to market with electrified trucks of their own. As for the sports car? Few people believe it will ever see the light of day, qualifying as even more of a pipe dream than the truck. At least the truck has a believable premise. The sports car is just more unmitigated bullshit and unbridled swingin’ dick-ism from America’s Master of Deception.
Despite Elon’s latest show, the facts are these: Tesla is a failed enterprise by every conceivable measure. And building a few high-priced machines for The Enlightened Elite does not constitute anything more than a boutique car company with nowhere to go but down. The Model 3 was supposed to fix all of that, but that is just not gonna happen, by any stretch of the imagination. Not even close, in fact.
As I said last week, I predict that Musk, after being horribly embarrassed by the total failure of the Model 3, will finally grow tired of the whole auto thing and wind down Tesla, selling off its technology to whoever will give him the most cash money for it, so he can then focus on his real love – firing off rockets and colonizing Mars.
Then we’ll all finally have something to be thankful for.
And that’s the High-Octane Truth for this week.
****************
From Peter DeLorenzo's AutoExtremist piece 11-20-2017 "America's Master of Deception."
Date: Monday, November 20, 2017 at 01:13PM
By Peter M. DeLorenzo
Detroit. The script has become predictable. In what is now a staged “love-in” ritual more aligned with old-time tent preachers than anything else, the Supreme Leader of All that is Righteous and Holy in Silicon Valley descends from the mountaintop and bestows his wisdom and visionary brilliance to a frenzied crowd filled with his salivating disciples and adoring acolytes.
Spewing his usual thought balloons filled with promises and boasts unburdened by reality, St. Elon Musk is The Master, orchestrating The Show to End All Shows, a wondrously self-indulgent and unbridled display of hubris and obfuscation designed to distract all in attendance from the High-Octane Truth about what’s really going on at the automotive cult known as “Tesla.”
Except it was apparent to everyone who still had the ability for rational thought – or at least those who hadn’t had the custom-designed - and fantastic!- Muskian chip embedded in their brains – that Musk was attempting the oldest trick in the con man’s handbook, which is to distract, deny and deter from the real issue at hand. But this was far more egregious than that “pay no attention to that man behind the curtain” scene at the end of The Wizard of Oz; this was out-and-out calculated fraud on the grandest of scales.
The Bright New Automotive Future as promised by Musk and embodied in the Tesla automobile is a canard that has been a failed enterprise from the very beginning. Ruthlessly unprofitable and racking up debt at a prodigious rate, Elon Musk has conned Wall Street and the holier-than-thous in the greener-than-thou enclaves of The New Enlightened to believe that he – through his Magic Pony, aka Tesla – is the solution to all societal ills and if only the rest of the automotive universe would simply cease and desist the world would be a decidedly much better place, free and unfettered by the dismal dullards who make up the defunct remnants of the failed U.S. automotive industry.
Needless to say, if any current automaker, or automotive supplier, or any corporate entity in America for that matter had conducted itself like Tesla, Wall Street would have moved decisively to bury the offending company while branding it as a criminal affront to the tenets of free enterprise.
Instead, we have the enablers on Wall Street completely flummoxed by Musk, jacking up the stock while relentlessly praising his “vision,” conveniently ignoring the fact that Tesla builds $100,000 vehicles fraught with consistent, serious quality problems, and that the much-ballyhooed Model 3 – St. Elon’s promise of a mainstream, “affordable” Tesla that would doom Detroit with a resounding thud of certainty – has been an abject failure that is apparently unbuildable at anything approaching the promised $35,000 “loss leader” pricing or the fanciful boast of 500,000 per-year volumes. (Actually, that number is sheer lunacy. The real number will be lucky to reach 20 percent of that total, in three years.)
So, with his company about to go down, and the promise of the Model 3 finally making Tesla a respected automaker lying in pieces on the ground, what does St. Elon, this country’s resident con man, do? He holds a séance for the Muskian Faithful to introduce a Class 8 all-electric semi-truck – without an existing national infrastructure to support it (although Musk insists he will take care of that with a network of “megachargers”) – that will “transform the industry!” because, well, you know, everything Musk touches is transformative, didn’t you get the memo?
And if that wasn’t enough, Musk plans on introducing a super sports car in 2020, which will be, in Musk’s words, “… the fastest production car ever made - period.” And, Musk being Musk, he just had to add, “The point of doing this is to give a hard-core smackdown to gasoline cars.” I’m not even going to bother regurgitating the details of this car because they’re completely irrelevant.
The net-net of this charade? The truck is a pipe dream, and frankly, other vehicle manufacturers will probably beat Musk to market with electrified trucks of their own. As for the sports car? Few people believe it will ever see the light of day, qualifying as even more of a pipe dream than the truck. At least the truck has a believable premise. The sports car is just more unmitigated bullshit and unbridled swingin’ dick-ism from America’s Master of Deception.
Despite Elon’s latest show, the facts are these: Tesla is a failed enterprise by every conceivable measure. And building a few high-priced machines for The Enlightened Elite does not constitute anything more than a boutique car company with nowhere to go but down. The Model 3 was supposed to fix all of that, but that is just not gonna happen, by any stretch of the imagination. Not even close, in fact.
As I said last week, I predict that Musk, after being horribly embarrassed by the total failure of the Model 3, will finally grow tired of the whole auto thing and wind down Tesla, selling off its technology to whoever will give him the most cash money for it, so he can then focus on his real love – firing off rockets and colonizing Mars.
Then we’ll all finally have something to be thankful for.
And that’s the High-Octane Truth for this week.
****************
From Peter DeLorenzo's AutoExtremist piece 11-20-2017 "America's Master of Deception."
I bought Tesla at $100 after checking out the pros and cons..Seems to be all cons here..what swayed me was the purchasing of the Toyota plant for penny’s on the dollar, with a 250,000 plus yearly capacity and the planned Model S and Musk’s history..What’s surprising to me is how few people realize that the model S far out sells any other high end car, Mercedes S class by 2 to 1..When Germany’s chancellor Angela Merkel summoned the heads of all the German auto makers the first thing out of her mouth was “‘What do you intend to do about Tesla’’ Well it’s to late. Tesla has a world wide recharging system in place with massive expansion plans...and yes they are throwing everything they’ve got and more into rapid expansion on all levels..there next car, a smaller suv the model Y will be more successful than the model 3 and no they’re cash burn doesn’t bother me...back at $100 a share it wasn’t a stock for the timid today it’s far more stable, as far as I’m concerned although not GM stable, which has gone nowhere...but is stable...I’m remaining long in Tesla and may buy the Tesla roadster if the stock continues to climb..Would never sell my 95 midnight pearl though..With any stock check out all the pros and cons..the longs perspective as well as the shorts perspective and make your own decision and don’t look back..if you do you may see me approaching in a 2020’’ish’’ Tesla roadster..
You probably know this already but Musk sold Pay Pal to help start Tesla..
You probably know this but Musk sold Pay Pal to start Tesla..
I didn’t know that. I don’t know much about the guy but someone also mentioned he made his money in the dot com bubble. Tesla has been doing good the past few weeks. Chipotle got news the founder is stepping down so that gives way to new ideas and concepts to implement. The stock popped up for a bit and has been slowly going back down last time I looked. Don’t really follow cmg much anymore and only pay attention to Tesla when it goes to $300
Who had fun with LFIN today? Spill it!!!
No - you clearly fail to understand the underlying strategy! You need electric cars for Mars. Create a new market and then position yourself to supply that market.
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