Investor's Corner
Before the bell: A look at Tesla’s turbulent week on the stock market
From the Model 3 delivery event to the Q3 earnings report, TSLA had quite the week on the NASDAQ.
The stock kicked off the week at a 1% increase after the Model 3 delivery event. As more of the information from the event resonated on Wall Street, the stock lowered a bit. While it was widely known that there would be levels of pricing, many were surprised at just how high some of the options went, expecting the whole shebang to cap out around $42,000 instead of the higher tiers the company offered. First photos of Tesla’s Model 3 online configurator revealed a starting price of $49,000 for first production cars and topping at nearly $60,000 for a fully optioned rear wheel drive version.
Adding to some of the week’s woes was news that the government incentives for the car are running out.
In previous securities filings, Tesla warned investors that changes to incentive programs “could have some impact on demand for our products and services.”
Combating the projections of some stock decreases is the fact that the Tesla Model 3 pricing is still pretty fair for the EV market. The Model 3 is one of the lowest cost EVs, while sporting one of the highest ranges on the market. By comparison, the Chevy Bolt that starts at $36,620 tops out at 238-miles of range while the premium Model 3 will have a 310-mile per charge driving range.
Also adding to the good news on the Tesla side is that those who have tried the Model 3 are pleased with it.
A Business Insider journalist who got to drive it said, “I drove it for no time at all, but I’ve driven pretty much every other all-electric car you can buy, and I can safely say that the Model 3 has no competition.”
The second quarter earnings report presented a perfect alignment of revenue, Model 3 gains and overall capital, which led to an immediate 2% jump and another another 6% gain in after-hours trading. The after-hours action demonstrated that the initial reaction to the numbers for Q2 2017 was hugely positive, with the stock hitting $345.
The stock opened Thursday at $346.50, a bump from Wednesday’s closing in the mid-320s.
Analysts at Baird Equity Research still view Tesla Inc ‘s stock as a “top pick for 2017”, with the firm’s Ben Kallo maintaining an Outperform rating on TSLA and an unchanged $368 price target.
Piper Jaffray Analyst Alexander Potter upped his price target for the EV company from $368 to $386 after the earnings call. Potter’s new price target implies an over 18% upside for TSLA, which has increased its price by over 50% since the start of 2017.
It isn’t smart to “bet against a story with this much momentum,” Potter told TheStreet.
It’s no surprise that analysts are more bullish than they were before after the earnings call and quarterly report where Tesla announced that it is “averaging over 1,800 net Model 3 reservations per day” since the handover event.
Automotive revenue slightly declined over the first quarter, while energy generation and storage grew 34%. Tesla attributed the gains in energy generation and storage to, “a greater percentage of cash sales and higher deployment of energy storage systems.”
Tesla also stated that, “Model S and Model X deliveries to increase in the second half of 2017, as compared to the first half of the year.”
While Tesla expects the Model 3 to carry a negative gross margin in Q3, they are expecting it to go positive in Q4. In Q3 the overall automotive gross margin is expected to dip below 20%, currently at 27.9%, before recovering and growing in Q4 and beyond.
Hedge fund managers lost more than half a billion dollars because of their bets against Tesla, according to a CNBC report, so to say the stock created a shockwave would be an understatement.
Tesla closed yesterday at $347.09, a significant up from Wednesday’s $325.89.
It has been a wild week for the EV giant for sure. The stock should be a little quieter today and going into the weekend, but with CEO Elon Musk at the helm, a new game-changing announcement could come at any time.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
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