Connect with us

Investor's Corner

Tesla (TSLA) gets optimistic outlook from billionaire investor, Wall St analyst amid Q3 results

[Credit: Harbles/Twitter]

Published

on

Tesla’s Q3 2018 vehicle production and delivery report revealed that the electric car maker set new records once more. Over the course of the third quarter, Tesla manufactured a total of 80,142 vehicles and delivered a total of 83,500 cars. Model 3 production and deliveries were at 53,239 and 55,840, meeting Tesla’s ambitious self-imposed targets. These results appear to have impressed Wall Street, with billionaire investor Ron Baron recently sharing his optimistic forecast on the company.

In a segment on CNBC‘s Squawk Box, Ron Baron of Baron Capital noted that he believes Tesla is headed towards even more growth. Baron’s firm, which has $28.3 billion in assets under management, holds 1.65 million TSLA shares. The Wall Street veteran noted that he believes Tesla’s electric car and battery storage business will be worth $500 billion each by 2030, giving the company an estimated total market cap of $1 trillion in the next 11 years.  

“I think it could be a $500 billion battery business, $500 billion car business. I give that better than 50-50 chance. I think this is going to be the biggest car company. I think they’re going to have 10 million cars, 15 million cars sold per year eventually,” he said.

The billionaire investor further noted that Tesla is closing in on being self-funding, particularly since the costs of batteries are expected to drop over the next few years. Baron’s insights into Tesla’s sustainability were ultimately shared by Wall Street analyst Romit Shah from Nomura Instinet. While speaking at a segment in Bloomberg Daybreak: Americas, Shah noted that with Q3’s results, Tesla looks set to be sustainably profitable.

“I think they’re definitely sustainable. In fact, I would expect that deliveries continue to increase in the fourth quarter and in the next year. Keep in mind; they haven’t even started leasing the Model 3, which is how most consumers prefer to finance their car. They haven’t started shipping the Model 3 overseas in Europe and China. So, I still think there’s a lot of runways for them to grow,” Nomura stated.

Advertisement

The Nomura Instinet analyst further stated that he believes Tesla’s production and delivery figures in the third quarter might be the point where the company could break-even on a cash basis going forward.

Tesla delivery push as Q3 comes to an end. [Credit: Harbles/Twitter]

“I think they’re there now. Whether they’re at a slight profit or at a slight loss this quarter, I think you’re looking at it here. 80,000+ deliveries a quarter should get them to break even, and in the fourth quarter, if they’re able to increase deliveries, which we think, closer to say, 100,000, then I think this company is gonna be profitable and probably sustainably so,” Shah said.

It remains to be seen if Tesla did achieve its goal of becoming profitable this Q3, though Elon Musk did state in an email to employees over the weekend that the company is “very close” to profitability. That said, the Nomura analyst’s point about Tesla having opportunities to grow the Model 3’s market stands in line with the company’s statement in its Q3 delivery and production report, which also mentioned leasing and foreign markets. 

“Our Q3 Model 3 deliveries were limited to higher-priced variants, cash/loan transactions, and North American customers only. There remain significant opportunities to grow the addressable market for Model 3 by introducing leasing, standard battery and other lower-priced variants of the car, and by starting international deliveries,” Tesla wrote. 

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

Advertisement
Comments

Elon Musk

Tesla analyst says Musk stock buy should send this signal to investors

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish.”

Published

on

(Credit: Tesla)

Tesla CEO Elon Musk purchased roughly $1 billion in Tesla shares on Friday, and analysts are now breaking down the move as the stock is headed upward.

One of them is William Blair analyst Jed Dorsheimer, who said in a new note to investors on Monday that Musk’s move should send a signal of confidence to stock buyers, especially considering the company’s numerous catalysts that currently exist.

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

Dorsheimer said in the note:

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish. This purchase is Musk’s first buy since 2020. To us, this sends a strong signal of confidence in the most important part of Tesla’s future business, robotaxi.”

Advertisement

Musk putting an additional $1 billion back into the company in the form of more stock ownership is obviously a huge vote of confidence.

He knows more than anyone about the progress Tesla has made and is making on the Robotaxi platform, as well as the company’s ongoing efforts to solve vehicle autonomy. If he’s buying stock, it is more than likely a good sign.

Tesla has continued to expand its Robotaxi platform in a number of ways. The project has gotten bigger in terms of service area, vehicle fleet, and testing population. Tesla has also recently received a permit to test in Nevada, unlocking the potential to expand into a brand-new state for the company.

In the note, Dorsheimer also touched on Musk’s recent pay package, revealing that William Blair recently met with Tesla’s Board of Directors, who gave the firm some more color on the situation:

“We recently participated in a meeting with Tesla’s board of directors to discuss the details of Musk’s performance package. The board is confident of its position in the Delaware case and anticipates a verdict by end of year. It does not expect a similar situation to occur under new Texas jurisdiction. Musk has the board’s full support, and we expect he’ll get more than enough shareholder support for this to pass with flying colors.”

Advertisement

Tesla stock is up over 6 percent so far today, trading at $421.50 at the time of publication.

Continue Reading

Elon Musk

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

Prior to this latest move, Musk’s most recent purchase was for about 200,000 shares worth $10 million in 2020.

Published

on

Gage Skidmore from Surprise, AZ, United States of America, CC BY-SA 2.0 , via Wikimedia Commons


Tesla (NASDAQ:TSLA) shares rose on Monday after CEO Elon Musk disclosed a rare insider purchase of company stock worth about $1 billion. 

A filing with the U.S. Securities and Exchange Commission (SEC) revealed that Musk acquired 2.57 million shares last Friday at various prices. The move represents Musk’s largest TSLA purchase ever by value, as per Verity data.

Elon Musk’s TSLA purchase

The disclosure sent Tesla shares up more than 8% in premarket trading Monday, as investors read the purchase as a notable vote of confidence, as stated in a CNBC report. Tesla stock had closed slightly lower Friday but remains more than 25% higher over the past three months. It should be noted that prior to this latest move, Musk’s most recent purchase was for about 200,000 shares worth $10 million in 2020.

Market watchers say the purchase could help shore up investor sentiment amid a volatile year for TSLA stock. Shares have faced pressure from a variety of factors, from year-over-year sales challenges due to the new Model Y changeover, political controversies tied to Musk, and reduced U.S. incentives for EVs under the Trump administration. Nevertheless, analysts such as Wedbush’s Dan Ives stated that Musk’s purchase was a “huge sign of confidence for Tesla bulls and shows Musk is doubling down on his Tesla A.I. bet.”

Tesla and Elon Musk

Musk already owns about 13% of Tesla, and his latest purchase comes as the company prepares for a key shareholder vote in November. Investors will decide whether to approve a compensation package for Musk that could ultimately be worth as much as $975 billion if ambitious market value milestones are achieved. The package has a long-term target of pushing Tesla’s market capitalization to $8.5 trillion, compared with about $1.3 trillion at Friday’s close.

Advertisement

Wall Street’s current consensus price target still implies a roughly 20% decline from current levels, though some Tesla bulls remain optimistic that the company could shift its focus toward autonomy, AI, and robotics. Musk has also asked shareholders to approve an investment into his latest venture, xAI.

Continue Reading

Investor's Corner

Tesla bear turns bullish for two reasons as stock continues boost

“I think from a trading perspective, it looks very interesting,” Nathan said, citing numerous signs of strength, such as holding its 200-day moving average and holding against its resistance level.

Published

on

Credit: Tesla Manufacturing

A Tesla bear is changing his tune, turning bullish for two reasons as the company’s stock has continued to get a boost over the past month.

Dan Nathan, a notorious skeptic of Tesla shares, said he is changing his tune, at least in the short term, on the company’s stock because of “technicals and sentiment,” believing the company is on track for a strong Q3, but also an investment story that will slowly veer away from its automotive business.

“I think from a trading perspective, it looks very interesting,” Nathan said, citing numerous signs of strength, such as holding its 200-day moving average and holding against its resistance level.

He also said he believes a rally for the stock could continue as it heads into the end of the quarter, especially as the $7,500 electric vehicle tax credit is coming to an end at the end of the month.

With that being said, he believes the consensus for Q3 deliveries is “probably low,” as he believes Wall Street is likely underestimating what Tesla will bring to the table on October 1 or 2 when it reports numbers for the quarter.

Tesla shares are already up over five percent today, with gains exceeding nine percent over the past five trading days, and more than fourteen percent in the past month.

While some analysts are looking at the performance of other Mag 7 stocks, movement on rates from the Federal Reserve, and other broader market factors as reasoning for Tesla’s strong performance, it appears some movement could be related to the company’s recent developments instead.

Over the past week, Tesla has made some strides in its Robotaxi program, including a new license to test the platform in the State of Nevada, which we reported on.

Tesla lands regulatory green light for Robotaxi testing in new state

Additionally, the company is riding the tails of the end of the EV tax credit, as inventory, both new and used, is running extremely low, generally speaking. Many markets do not have any vehicles to purchase as of right now, making delivery by September 30 extremely difficult.

However, there has been some adjustments to the guidelines by the IRS, which can be read here:

Tesla set to win big after IRS adjusts EV tax credit rules

Tesla is trading at around $389 at 10:56 a.m. on the East Coast.

Continue Reading

Trending