Despite Record Q1 Deliveries, Some Investors Still Question Tesla's 'Inconsistent' Operational Performance

Argus said in a note released Tuesday it is concerned about Tesla's inconsistent operational and financial results despite record deliveries in the first quarter of 2017. The firm is also wary about the impact of further dilutive stock offerings.

Upbeat Q1 Deliveries Data

Analyst Bill Selesky noted company-released shipment data on April 3, estimating record deliveries of 25,000 in the first quarter, which exceeded its forecast of 24,200 vehicles. The management expects deliveries of 47,000 to 50,000 vehicles for the first half of the year, the analyst added.

Lowering Estimates

Argus expects Tesla to post an operating loss for 2017, due to costs associated with the upcoming Model 3 launch. The firm widened to its 2017 operating loss estimate to $2.56 per share from $1.98 per share, premised on its higher full-year cost estimate of $2.45 billion. "These increased costs are primarily the result of assembly line inefficiencies and higher labor costs for the Model 3," the firm said.

Additionally, Argus lowered its 2018 earnings per share estimate to $1.20 from $2.32, assuming higher Model 3 costs.

"We estimate that manufacturing efficiencies and margin expansion will not meaningfully boost the bottom line until 2019," the firm opined.

Tesla Maintained At Hold

As such, Argus said it maintains its Hold rating on shares of Tesla, following the disappointing fourth-quarter results and its wider loss forecast for 2017.

Tesla's Irreplicable Panache Merits An Upgrade Tesla's 2016 In Review: From Model 3 To Gigafactory And Acquisitions