Oppenheimer's Bull Vs. Bear Debate On Tesla

Shares of Tesla Inc TSLA aren't far off their all-time highs, but the stock remains one of the most divisive on Wall Street. Oppenheimer looked at five battleground points for bulls and bears in a Tuesday report. 

The Analyst

Oppenheimer's Colin Rusch maintains a Perform rating on Tesla's stock with no assigned price target.

The Thesis

Rusch named five key points at the center of the debate between Tesla bulls and bears. 

• Margins. Bulls would argue Tesla's Model 3 is approaching a "critical benchmark" in disrupting the transportation industry, while bears highlight a history of production inefficiencies that do not bode well for sustainable operating cash flows.
• Competition. Bulls appreciate Tesla's "impressive" market share with the Model S and Model X and a large order backlog for the Model 3. On the other hand, competition from "established automakers" like Jaguar and BMW implies 2019 will be Tesla's first "true test" year.
• ADAS. Bulls believe Tesla can be a leader in the advanced driver-assistance systems space, but the counter argument claims Tesla is "falling behind" the competition.
• Cash. Both bulls and bears for the most part expect Tesla to tap the capital market to help reconcile the $2.3-billion spread between its assets and liabilities.
• Strategic partnerships. Bulls are excited that existing partnerships and potential new ones will help Tesla with capital access and geographic expansion. Bears see Tesla "pushing" suppliers and partners to meet its aggressive deadlines at the risk of "burnout."

Price Action

Tesla shares were down 4.3 percent at $354.83 at the time of publication Tuesday afternoon. 

Related Links:

Gordon Johnson Lowers Tesla Price Target To $93, Says Sales Will Suffer Between 2019 And 2020

KeyBanc Says Tesla Deliveries Tracking Above Estimates, Raises Model 3 Deliveries Forecast To 30,000 

Photo courtesy of Tesla.