Tesla (TSLA) Could Pop On Earning - Dougherty & Co.
Andrea James from Dougherty and Company believes expectations are too low for Tesla (NASDAQ: TSLA) and that the upcoming earnings report could actually be a catalyst for the stock if volume reductions are tame. Her price target of $355 implies the stock could fly in the coming months as the company returns to profitability.
Tesla reports Q3 on Nov. 3 and the street is expecting a reduction in full year unit guidance. James does not believe that such a miss is a certainty and that the quarterly results have been de-risked in the stock. The street seems overly bearish on full year 2015 deliveries, and with the stock sinking closer to $200, the Q3 report may even be a positive catalyst.
Model X was a consumer catalyst, but not a Wall Street one. The Model X event spurred an increase in demand for both vehicles, including the Model S. Shortly after the Sept. 29 Model X unveiling, global wait times for new Model S orders increased to two to four months depending on geography. Capitalizing on this strong demand, Tesla is maximizing profitability for the first 20k to 30k reservations, selling first to those customers who want the highest end vehicle.
Production is ramping and demand looks good. Deliveries in early Q4 should be 60% to 70% higher than in early Q3. Also, global wait times are about two to four months, depending on geography.
Expectations for a return to profitability in 2016 should also help to boost shares.
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Shares of Tesla Motors closed at $210.09 yesterday.