7 Reasons Tesla (TSLA) Was Snubbed from By S&P - GLJ Research

September 8, 2020 7:26 AM EDT
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Price: $670.94 -0.39%

Rating Summary:
    21 Buy, 21 Hold, 11 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 19 | Down: 13 | New: 24
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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

For an analyst ratings summary and ratings history on Tesla click here. For more ratings news on Tesla click here.

Shares of Tesla closed at $378.00 yesterday.

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