# TSLA Analyst Coverage - 2017 Q4



## Michael Russo (Oct 15, 2016)

A good article from Matt at Evannex on the notorious T≡SLA advocate Jack Rickard, who nails the four key reason why betting on the LT for TSLA still makes loads of sense...

https://cleantechnica.com/2017/10/08/tesla-stock-going-950/


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## Michael Russo (Oct 15, 2016)

Matt's been busy over the weekend! 
Now over the shorts vs. the longs... guess I know who we're betting on, he?! 

https://cleantechnica.com/2017/10/08/epic-battle-happening-musk-tesla-haters/


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## Mattstyle (May 12, 2017)

http://fortune.com/2017/10/09/teslas-elon-musk-reveals-the-next-big-automotive-trend-gasoline/

Hilarious article

Edit: Time to short TSLA


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## garsh (Apr 4, 2016)

Mattstyle said:


> http://fortune.com/2017/10/09/teslas-elon-musk-reveals-the-next-big-automotive-trend-gasoline/
> 
> Hilarious article
> 
> Edit: Time to short TSLA


Wait... so, Fortune has decided that it's going to take on The Onion?
How the mighty have fallen.


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## Watts4me (Nov 25, 2016)

Tesla's Elon Musk Reveals the Next Big Automotive Trend: Gasoline
https://www.yahoo.com/newsroom/vibe...4c3898_a-33ce9de4-31d4-3a99-b202-731dce4c3898


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## garsh (Apr 4, 2016)

Fortune screwed up all of the news aggregation sites with this satirical article. I don't know why they decided this was a good idea.


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## Michael Russo (Oct 15, 2016)

garsh said:


> Fortune screwed up all of the news aggregation sites with this satirical article. I don't know why they decided this was a good idea.


Fortune's becoming a BIG disappointment...


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## Watts4me (Nov 25, 2016)

As I read it,I was thinking if this was an early April fool's joke.


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## Michael Russo (Oct 15, 2016)

A bit of morale boost if you have some jitters about TSLA ... 

http://host.madison.com/business/in...cle_56b3a554-678f-536d-840d-05dad2fd1536.html


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## $ Trillion Musk (Nov 5, 2016)

This just in: Tesla recalls 11,000 Model X SUVs. 

Announced at 3:59pm ET right at market close. 

WTF


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## Michael Russo (Oct 15, 2016)

Objectivity calls for me to post a more bearish perspective... yet - is it the T≡SLA fanboy in me ? - I can't seem to find these three reasons to worry so compelling... and certainly not the first one!!

https://investorplace.com/2017/10/tsla-stock-worry-reasons/2/


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## JWardell (May 9, 2016)

Safe Daddy Driver said:


> This just in: Tesla recalls 11,000 Model X SUVs.
> 
> Announced at 3:59pm ET right at market close.
> 
> WTF


Seems minor.
Related article:
https://electrek.co/2017/10/12/tesla-recall-model-x-vehicles/


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## SoFlaModel3 (Apr 15, 2017)

JWardell said:


> Seems minor.
> Related article:
> https://electrek.co/2017/10/12/tesla-recall-model-x-vehicles/


Voluntary recall for nothing major.


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## Michael Russo (Oct 15, 2016)

And, once in a while, there is somebody on Seeking Alpha who makes sense... 

https://seekingalpha.com/amp/article/4113566-teslas-long-target-500-1000


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## jmmdownhil (Sep 12, 2017)

Just saw this announcement that Tesla's head of battery engineering has left the company. Not sure what it means for battery production.

http://markets.businessinsider.com/...-battery-engineering-exits-2017-11-1007082563

Oops. Just saw that the announcement was posted on another thread yesterday.


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## Jayc (May 19, 2016)

jmmdownhil said:


> Just saw this announcement that Tesla's head of battery engineering has left the company. Not sure what it means for battery production.
> 
> http://markets.businessinsider.com/...-battery-engineering-exits-2017-11-1007082563


Probably just means there will be some internal restructuring in that division and usually change is good.

Why did you decide to post that link on this thread ?


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## jmmdownhil (Sep 12, 2017)

Jayc said:


> Probably just means there will be some internal restructuring in that division and usually change is good.
> 
> Why did you decide to post that link on this thread ?


Couldn't find a logical place at the time. Subsequently found that it was posted on another thread yesterday.


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## MichelT3 (Nov 16, 2016)

Don't know if it was a smart moment (always too late!) but I finally took the jump and bought my first $TSLA shares. Luckily I'm not superstitious, because I ended up with 13 today (put up a few different limits).
$312,63 at the moment. 
Took a small loss today, but I'm in for the long haul. I expect / hope the price will pick up as soon as M3 deliveries will take off, beginning 2018. Before that I plan to buy a bit more. But for a first buyer this was enough... 
Would be nice if this would help me buy my car more easily in a year.


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## MichelT3 (Nov 16, 2016)

Almost year ago, early december 2016 it had a low at $181. (Yeah, yeah, should have bought...)
Is it a viable thought that stock price will rise after the beginning of December again? Or is that too optimistic? Love your thoughts.


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## SoFlaModel3 (Apr 15, 2017)

MichelT3 said:


> Almost year ago, early december 2016 it had a low at $181. (Yeah, yeah, should have bought...)
> Is it a viable thought that stock price will rise after the beginning of December again? Or is that too optimistic? Love your thoughts.


Analysts are all over the place. I see targets ranging from $150 to $400.

In the near term the movement up or down will likely hinge on the success of Model 3 rollout. I would say it's a good sign that customer orders have begun. Let's keep the forward momentum going.

I'm in at $226 which I thought was borderline crazy fan boy


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## MichelT3 (Nov 16, 2016)

Michael Russo said:


> And, once in a while, there is somebody on Seeking Alpha who makes sense...
> 
> https://seekingalpha.com/amp/article/4113566-teslas-long-target-500-1000


I dearly hope so; $ 2000 per share would be 'kind of nice'...


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## $ Trillion Musk (Nov 5, 2016)

Any news on why TSLA dropped 3.5% so far this morning?


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## MichelT3 (Nov 16, 2016)

Safe Daddy Driver said:


> Any news on why TSLA dropped 3.5% so far this morning?


No idea why it dropped to $ 301.25, but for me opportunity to buy some more stock.


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## $ Trillion Musk (Nov 5, 2016)

One of the best videos explaining why Tesla is tremendously undervalued.


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## MelindaV (Apr 2, 2016)

My plan for picking up a few shares here and there since I made my reservation was to cash them all out as part of my down payment. Buy price ranging from $180 to $340, sold some around $350 to rebuy when lower. I expect before my delivery, the price will rise back up, but now think I’ll keep a few shares to see where it goes ($500+?)


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## MichelT3 (Nov 16, 2016)

Selling for a downpayment is still at least a year off for me. So I hope the price will go back up before that. No, I expect it will. Question is when and whether it will go down even more before... Because I want to buy more.


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## MelindaV (Apr 2, 2016)

I have a feeling (and probably totally wrong because don't have that crystal ball), that it will not get much lower than it currently is (barring all the wheels falling off the machine that makes the machine) but will dip in the next couple months before shooting back up.

Generally it seems the market as a whole dips a little at New Years, but Tesla doesn't always follow along like everyone else. And expect the next quarterly report to be the first week of Feb and will likely say they made fewer Model 3s than expected, but nothing holding them back going forward. The stock always seems to take the most pessimistic take-way from the earnings letters/calls.

I also expect 'if' the US tax credit is stricken, the market will initially react negatively to that (as some here have reacted with "Tesla is doomed without the $7500 buyer stimulus credit") more so than seeing the longterm benefit it would have to Tesla vs the disadvantage Tesla (and GM) would be in to the other manufacturers if it continues as originally written.


ETA: I should add, I also did not think it would drop back down to $300 after being up around $380 though, so.... what do I know.


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## BigBri (Jul 16, 2016)

I've been a bit bummed out as I missed most of the runup trying to play the market and predict drops thus my average share price is $350 so I've been down a good chunk of money for months now. Thinking going forward I should always have a sell order in @ 5%~ or so above my share price so I don't end up in this boat again.


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## MichelT3 (Nov 16, 2016)

BigBri said:


> I've been a bit bummed out as I missed most of the runup trying to play the market and predict drops thus my average share price is $350 so I've been down a good chunk of money for months now. Thinking going forward I should always have a sell order in @ 5%~ or so above my share price so I don't end up in this boat again.


But then you restrict yourself at just 5% profit. And can't prevent drops. Shouldn't that be 5% plus and minus? And when do you buy back?
Till now I don't want to play the market, but expect a gradual raise during the coming year as production picks up.


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## $ Trillion Musk (Nov 5, 2016)

BigBri said:


> I've been a bit bummed out as I missed most of the runup trying to play the market and predict drops thus my average share price is $350 so I've been down a good chunk of money for months now. Thinking going forward I should always have a sell order in @ 5%~ or so above my share price so I don't end up in this boat again.


$300 vs $350 won't be that big of a difference when the stock reaches $950 (as predicted by Jack Rickard last summer). Let's hope TSLA won't go down much further, but expect a bumpy ride until Model 3 production numbers hit the expected target.

To give some perspective, when the stock crashed to the 180s a year ago I thought it would keep going down due in part by a Republican ruled administration. As a result I had missed out on the 100+ point rise in the stock value in 1H 2017.

With Model 3 ramp up just around the corner, we should be a lot more optimistic this time around!


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## MichelT3 (Nov 16, 2016)

Safe Daddy Driver said:


> $300 vs $350 won't be that big of a difference when the stock reaches $950 (as predicted by Jack Rickard last summer). Let's hope TSLA won't go down much further, but expect a bumpy ride until Model 3 production numbers hit the expected target.
> 
> To give some perspective, when the stock crashed to the 180s a year ago I thought it would keep going down due in part by a Republican ruled administration. As a result I had missed out on the 100+ point rise in the stock value in 1H 2017.
> 
> With Model 3 ramp up just around the corner, we should be a lot more optimistic this time around!


Exactly what I'm hoping for...


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## BigBri (Jul 16, 2016)

MichelT3 said:


> But then you restrict yourself at just 5% profit. And can't prevent drops. Shouldn't that be 5% plus and minus? And when do you buy back?
> Till now I don't want to play the market, but expect a gradual raise during the coming year as production picks up.


Thats what I'd do  Just put a buy and sell order in designed to pick up more shares over time. Just want a lil something in place so I could ride the wave a bit. I could've got my share price down the last time it was over 350.



Safe Daddy Driver said:


> $300 vs $350 won't be that big of a difference when the stock reaches $950 (as predicted by Jack Rickard last summer). Let's hope TSLA won't go down much further, but expect a bumpy ride until Model 3 production numbers hit the expected target.
> 
> To give some perspective, when the stock crashed to the 180s a year ago I thought it would keep going down due in part by a Republican ruled administration. As a result I had missed out on the 100+ point rise in the stock value in 1H 2017.
> 
> With Model 3 ramp up just around the corner, we should be a lot more optimistic this time around!


Truth be told if I could hold til 950 I would but I managed to save up enough for the car and dumped it into the stock. At this point I've lost about 5 grand and it'd be a big stretch to make the car happen if I got the email. I was fully aware though that I've got probably a year til delivery so plenty of time to make some money and get out.


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## MichelT3 (Nov 16, 2016)

BigBri said:


> I managed to save up enough for the car and dumped it into the stock. At this point I've lost about 5 grand and it'd be a big stretch to make the car happen if I got the email. I was fully aware though that I've got probably a year til delivery so plenty of time to make some money and get out.


Ow! That's painful. Feel for you.
I'm now investing a sizeable portion of the car, but certainly not more (even if I had the money at hand). 
So the loss will be recoverable if the shares should drop 50%. But also enough for the gains to make possible the extra costs for much wanted AWD, SAS and Towing Hitch. If the shares double between now and end 2018. Won't get it sooner anyway.


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## BigBri (Jul 16, 2016)

MichelT3 said:


> Ow! That's painful. Feel for you.
> I'm now investing a sizeable portion of the car, but certainly not more (even if I had the money at hand).
> So the loss will be recoverable if the shares should drop 50%. But also enough for the gains to make possible the extra costs for much wanted AWD, SAS and Towing Hitch. If the shares double between now and end 2018. Won't get it sooner anyway.


I can't complain too much as I've learned quite a bit about investing and I'm sure I've made some money back from the -5k. Kind've hard to tell when I've jumped in and out so many times. At this point I'm just staying long but want to put something in place to enable me to get my share price down if volatility continues but I imagine I'll be able to get back into some good profits next year. Once the bottleneck clears I imagine will be in the 350-380 range again.


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## Tesla Ninja (Sep 8, 2017)

Opinions on this article?

https://www.google.ca/amp/s/seekingalpha.com/amp/article/4129420-teslas-fatal-flaw-bulls-ignoring


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## garsh (Apr 4, 2016)

> If we give them a net profit margin of 10%, which is above the industry average...


Mistake #1. Net margin doesn't matter for now, because they are in growth mode, unlike most other auto manufacturers. Tesla aims for 25% gross margin, while other manufacturers only have 12-15% gross margin. Plus, Tesla doesn't have dealers taking a cut of profit margin. Because of this, I think 10% would be pretty low for Tesla.

References:
https://electrek.co/2017/05/08/tesla-model-3-gross-margin/
https://www.fool.com/investing/gene...-motors-could-be-profitable-if-it-wanted.aspx



> The selling, general, and administrative expenses are 21%, twice the level of Toyota's.


Comparing administrative expenses as a percentage of sales between a company that sold 76,000 cars in 2016 to one that sold 2.5 million cars in 2016 is disingenuous. And again, your also comparing a growing company to a stagnant company.



> The Model 3 is a make-or-break investment for Tesla right now.


The "Problem #4" part of the article is spot-on. The Model 3 is a make-or-break moment for Tesla. They have to get this right. Not only does each individual car have to be good and high-quality, but they need to get that production line fast & automated to bring down the costs, and thus increase gross margins on cars sold.

Long article. I'll try to finish it later...


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## NOGA$4ME (Sep 30, 2016)

Ummm...it's SeekingAlpha, so I would take it with a grain of salt. With a few exceptions, basically SeekingAlpha is a meeting place for Tesla bears to commiserate and try to justify their poor decisions in life.


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## Tesla Ninja (Sep 8, 2017)

garsh said:


> Mistake #1. Net margin doesn't matter for now, because they are in growth mode, unlike most other auto manufacturers. Tesla aims for 25% gross margin, while other manufacturers only have 12-15% gross margin. Plus, Tesla doesn't have dealers taking a cut of profit margin. Because of this, I think 10% would be pretty low for Tesla.


So let's adjust the numbers

Say 5000 vehicles per week so 260,000 per year at 25% profit per car ($10,000) = $2.6B/year
$2.6B/17% ROE = $15B book value
This is much more closer to their current book value of $4.7B

We need to see that production rate for it all to make sense


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## JWardell (May 9, 2016)

Don't forget Tesla makes other products besides cars as well. Their sales and profits from batteries and solar panels are also going to accelerate drastically over the next few years


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## Michael Russo (Oct 15, 2016)

Yet another SA guy who seems to get it... 

https://seekingalpha.com/article/4131329-tesla-model-3-ramp-gearing-takeoff


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## MichelT3 (Nov 16, 2016)

I think that the impressive numbers of reservations for the Semi's also have an impact on investor sentiments. Even though the effect money wise isn't that big.


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## BigBri (Jul 16, 2016)

Finally, back into profit. Placed a stop order to protect it! Merry Christmas from Elon lol.


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## MichelT3 (Nov 16, 2016)

BigBri said:


> Finally, back into profit. Placed a stop order to protect it! Merry Christmas from Elon lol.


But when will you buy back?
I mean it has dropped a bit again, but with all those stockpiled cars it probably is about to take another jump soon.


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## BigBri (Jul 16, 2016)

MichelT3 said:


> But when will you buy back?
> I mean it has dropped a bit again, but with all those stockpiled cars it probably is about to take another jump soon.


It's hard to say. I expected big jumps after the semi reveal and the July event and neither really happened. Markets are strange at times. I'm just not comfortable with the average share price of $350. Tesla has big peaks and valleys and I've tended to make an emotional purchase on a peak thinking I'm 'missing out' on something. I did miss the big runup from 200s which sucked but thats elicited that emotional response a few times haha. I would like to be back in asap for the quarterly report but maybe I'll be out, hard to say. It did dip yesterday and sell off on me. There will be a downturn again at some point and I can always get back in then.


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## MelindaV (Apr 2, 2016)

this morning's headlines.... new highs and brink of disaster. ha


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## MichelT3 (Nov 16, 2016)

Well, TSLA went up again to $ 343 today.
I'm virtually at over € 1000 net now. Will hold on to them, because that's not what I'm aiming for.


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## garsh (Apr 4, 2016)

Despite Likely Near-Term Weakness, Tesla Inc Stock Is a Long-Term Winner

_Losing money is just a natural feature of hyper-growth companies in their early stages. So long as gross margins are high (which they are at Tesla), robust revenue growth will drive huge operating expense leverage, and huge losses will turn into huge profits.

Also, yes, TSLA stock has a massive sales multiple that dwarfs the sales multiples at every other auto company. But Tesla also has a revenue growth rate which dwarfs the growth rates at every other auto company._​


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