7 Reasons Tesla (TSLA) Was Snubbed from By S&P - GLJ Research
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GLJ Research analyst Gordon Johnson reiterated a Sell rating and $19.00 price target on Tesla (NASDAQ: TSLA) raking the likely reasons Tesla was snubbed from S&P inclusion:
1) poor earnings quality since the company has only shown positive net income in 4 of the last 26 quarters, excluding one-time credit sales
2) poor balance sheet/cash flow quality
3) perpetual equity issuance to fund operations - In 1Q19 management claimed it would be profitable in all quarters going forward and never need to raise capital again; a month later results showed a loss of $700mn and since, the company has raised ~$10bn in capital.
4) problems with ability to raise capital moving forward possibly since the (former) largest shareholder cut its stake by 33% recently
5) demand problems
6) undefined accounts receivable ("A/R") balance in excess of $1.4bn - despite auto sales falling -8% q/q, TSLA's still undefined A/R balance grew +17% q/q
7) large stock-based comp expenses in 3Q20, pushing bottom line to net income losses
Shares of Tesla closed at $378.00 yesterday.
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