Investor's Corner
Tesla (TSLA) stock price is the highest it's been in 2019, closing in on 52-week high
Tesla stock (NASDAQ:TSLA) recently crossed the $360 barrier, effectively hitting a year-to-date high. If Tesla maintains this momentum, the electric car maker may find itself within striking distance of its all-time high, especially if its Q4 2019 results are positively received by the market.
Tesla opened Friday at $361.05 per share, rising as high as $365.21 as of writing. This is the highest that Tesla has been in 2019 so far, with the closest one being November 19, when TSLA stock knocked on $359.99 before closing at $359.52. In a way, this bodes well for Tesla, considering that just a couple of months ago, the electric car maker’s shares were at the $240-$250 level.
Tesla has not had an easy time in 2019, being bogged down by pessimistic outlooks from Wall Street and missed internal targets. Following a first-quarter and second-quarter loss, TSLA stock dipped so much that it traded as low as $176.99 per share on June 3. Tesla recovered in a relatively slow and steady manner, at least until its blockbuster Q3 2019 earnings, which exceeded Wall Street’s expectations.
This fourth quarter, Tesla has yet another opportunity to surprise. CEO Elon Musk has been quite subdued this Q4, refraining (at least for now) from declaring hyper-ambitious targets for the company in terms of its production and delivery numbers. During the second-quarter earnings call, Musk noted that Q3 will likely be a break-even quarter, and Q4 will be profitable. These expectations were broken in the third quarter when instead of breaking even, Tesla posted a profit.
Amidst Elon Musk’s relative silence, Tesla does have some positive momentum carrying it towards the end of the year. Unlike past quarters, Tesla does not seem to be engaging in its now-trademark end-of-quarter delivery push, which involves the company going all hands on deck around the clock in a mad dash to deliver as many vehicles as possible during the final month of a quarter. It appears that deliveries are ongoing en masse this Q4, but the sense of near-desperate urgency present in past quarters does not seem to be there.
Apart from these, signs are abounding that Tesla Model 3 demand remains healthy. As noted by observations from the Tesla community, the all-electric sedan seemed to be sold out for 2019, with only a few areas assuring customers of delivery before the end of the year. In several territories in Europe and even in Asia, Model 3 deliveries for new orders are now estimated for Q1 2020.
Tesla has also been progressing well in its efforts to expand its reach to other countries. Gigafactory 3 Phase 1 has been fully completed, and mass production of the company’s Made-in-China Model 3 has begun. Tesla has also received a license to sell the all-electric sedan locally. Furthermore, the Made-in-China Model 3 has been granted government incentives, which will likely make the vehicle more attractive to mainstream buyers. Just recently, truckloads of Tesla Model 3 have been spotted being transported from Gigafactory 3, giving the impression that initial deliveries may just be around the corner.
Of course, Tesla does need to meet its ambitious targets to fully meet its own guidance. The electric car maker has estimated that it would deliver about 360,000 to 400,000 vehicles in 2019. Following Q3’s results, Tesla will need to deliver about 105,000 vehicles in the fourth quarter to meet this goal. If it does, then it would not be surprising if Tesla stock ends up being in striking distance of its all-time-high of $383.45 per share, which was achieved on June 19, 2017.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Elon Musk
Tesla locks in Elon Musk’s top problem solver as it enters its most ambitious era
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla has granted Senior Vice President of Automotive Tom Zhu more than 520,000 stock options, tying a significant portion of his compensation to the company’s long-term performance.
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla secures top talent
According to a Form 4 filing with the U.S. Securities and Exchange Commission, Tom Zhu received 520,021 stock options with an exercise price of $435.80 per share. Since the award will not fully vest until March 5, 2031, Zhu must remain at Tesla for more than five years to realize the award’s full benefit.
Considering that Tesla shares are currently trading at around the $445 to $450 per share level, Zhu will really only see gains in his equity award if Tesla’s stock price sees a notable rise over the years, as noted in a Sina Finance report.
Still, even at today’s prices, Zhu’s stock award is already worth over $230 million. If Tesla reaches the market cap targets set forth in Elon Musk’s 2025 CEO Performance Award, Zhu would become a billionaire from this equity award alone.
Tesla’s problem solver
Zhu joined Tesla in April 2014 and initially led the company’s Supercharger rollout in China. Later that year, he assumed the leadership of Tesla’s China business, where he played a central role in Tesla’s localization efforts, including expanding retail and service networks, and later, overseeing the development of Gigafactory Shanghai.
Zhu’s efforts helped transform China into one of Tesla’s most important markets and production hubs. In 2023, Tesla promoted Zhu to Senior Vice President of Automotive, placing him among the company’s core global executives and expanding his influence beyond China. He has since garnered a reputation as the company’s problem solver, being tapped by Elon Musk to help ramp Giga Texas’s vehicle production.
With this in mind, Tesla’s recent filing seems to suggest that the company is locking in its top talent as it enters its newest, most ambitious era to date. As could be seen in the targets of Elon Musk’s 2025 pay package, Tesla is now aiming to be the world’s largest company by market cap, and it is aiming to achieve production levels that are unheard of. Zhu’s talents would definitely be of use in this stage of the company’s growth.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
Tesla stock (NASDAQ: TSLA) just got a price target boost from its biggest bear, Gordon Johnson of GLJ Research, who raised his expected trading level to one that is 95 percent lower than its current trading level.
Johnson pushed his Tesla price target from $19.05 to $25.28 on Wednesday, while maintaining the ‘Sell’ rating that has been present on the stock for a long time. GLJ has largely been recognized as the biggest skeptic of Elon Musk’s company, being particularly critical of the automotive side of things.
Tesla has routinely been called out by Johnson for negative delivery growth, what he calls “weakening demand,” and price cuts that have occurred in past years, all pointing to them as desperate measures to sell its cars.
Johnson has also said that Tesla is extremely overvalued and is too reliant on regulatory credits for profitability. Other analysts on the bullish side recognize Tesla as a company that is bigger than just its automotive side.
Many believe it is a leader in autonomous driving, like Dan Ives of Wedbush, who believes Tesla will have a widely successful 2026, especially if it can come through on its targets and schedules for Robotaxi and Cybercab.
Justifying the price target this week, Johnson said that the revised valuation is based on “reality rather than narrative.” Tesla has been noted by other analysts and financial experts as a stock that trades on narrative, something Johnson obviously disagrees with.
Dan Nathan, a notorious skeptic of the stock, turned bullish late last year, recognizing the company’s shares trade on “technicals and sentiment.” He said, “From a trading perspective, it looks very interesting.”
Tesla bear turns bullish for two reasons as stock continues boost
Johnson has remained very consistent with this sentiment regarding Tesla and his beliefs regarding its true valuation, and has never shied away from putting his true thoughts out there.
Tesla shares closed at $431.40 today, about 95 percent above where Johnson’s new price target lies.
Tesla AI5 chip nears completion, Elon Musk teases 9-month development cadence
Tesla Model Y and Model 3 named safest vehicles tested by ANCAP in 2025
