Tesla Inc TSLA reported Wednesday with strong quarterly results, but the stock has not budged and is trading steeply lower. Here's what the sell side has to say.
The Tesla Analysts: Needham analyst Rajvindra Gill has an Underperform rating on Tesla shares.
Wedbush analyst Daniel Ives maintained an Outperform rating and $1,400 price target.
GLJ Research analyst Gordon Johnson has a Sell rating and a $67 price target.
Needham Disappointed By Lack Of Upward Delivery Guidance Revision: Tesla 2021 deliveries rose a solid 86% year-over-year to 936,000, free cash flow climbed 80% to $5 billion and it reiterated its 50% multi-year annual delivery growth target, Needham analyst Gill said in a note.
Given the stock's elevated valuation and heightened investor expectation, Needham expected the management to increase the targeted production growth rate, the analyst said. This may have to do with the supply chain challenges that are weighing on production and the lack of any new model introduction in 2022, he added.
Automotive gross margins, excluding ZEV credits, grew only 40 basis points to 29.2% in the fourth quarter, trailing the 31% quarter-over-quarter revenue growth, Gill noted.
"We are encouraged with Tesla's current momentum in 4680 battery cells, which could lower the costs of the battery packs and reduce the overall BOM," the analyst said in the note.
Related Link: Why This Analyst Thinks Tesla Is a $2,500 Stock And When It May Reach That Price Target
Wedbush Highlights 2 Potential Game Changers: Tesla's better-than-expected overall automotive gross margin highlights the efficiency of Tesla's Gigafactory Shanghai, Wedbush analyst Ives said. Cash from operations came in at $4.59 billion, also ahead of the consensus of $2.32 billion, he added.
"Taking a step back, with the chip shortage still a major overhang on the auto space and logistical issues globally, these delivery numbers combined with this 'impressive earnings beat' speaks to an EV demand trajectory that looks quite robust for Tesla with clear momentum heading into 2022," Ives said.
Tesla confirmed that Model Y builds started in Gigafactory Austin in 2021, with deliveries to customers starting once final certification is achieved, the analyst noted. CEO Elon Musk said on the earnings call that the production ramp of 4680 batteries has started in Austin and the first battery will be delivered, he added.
The Austin production news and 4680 update, Ives said, are potential "game changers" to the Tesla story, especially in this supply-constrained backdrop.
The analyst continues to believe Tesla will have the capacity for overall 2 million units annually by the end of 2022, up from about 1 million currently.
GLJ Sees Tesla Growth Story Unravelling: When adjusting free cash flow for Tesla's unpaid bills, it is clear the company's business is not generating cash, GLJ analyst Johnson said.
With Tesla's market share shrinking globally, no new products planned for 2022, energy division's gross margin shrinking and the ramp of two new lower-margin plants, the company's growth story is likely to come undone, causing a collapse in the share price, the analyst said.
TSLA Price Action: At last check, Tesla shares were down 9.45% at $849.26.
Related Link: Tesla Battery Supplier Panasonic To Begin Mass Production Of New Longer-Range EV Batteries In 2023: Report
Photo: Tesla Inc.
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