Short-Term TSLA Price Movements - 2016

[Johan]

Personally, I think Q2 ERl6 is on track to be an epic moment in this investor's life and the catalyst for a massive short squeeze, if it hasn't already occurred earlier in the summer. What's the main difference between the end of 4Q15 and 1Q16? Answer: At the end of 2015, Model X production was barely moving with both parts issues and production line modifications needed. Now look at the end of 1Q16, with 750 Model X vehicles a week rolling off the assembly line. We no longer need 1200-1400 Model S cars produced per week. Once Model X production reaches parity with S production, 1000 Model S cars a week will be fine. Production numbers in Q1 almost surely exceeded deliveries because in a normal quarter the pipeline must get bigger, not smaller (more vehicles in transit, more Tesla stores in need of demo cars, etc.). So, even with the Model X parts headaches of Q1, Tesla produced another record number of vehicles. Now that the production lines have been tweaked and the parts issues are resolved, it's time to let the lines roll and deliver some extremely impressive numbers. Add income from Tesla energy this year, and we're going to see revenues that can make even the most grumpy CPA smile.

I share this outlook and would add that between now and up until and including Q2 ER there are several potential major catalysts: continued rise in M3 reservations? Official announcement of accelerated M3 schedule? Indirect signs of accelerated M3 plans (factory, GF 2, capital raise, hiring stint etc)? M3 reveal part 2 with juicy details and perhaps visionary concepts with regard to autonomous driving or other unexpected stuff?

Model X is getting in order now and I won't dwell on whether the X was the right design move from Tesla, as long as people line up to buy it it really doesn't matter if a lot of people (including your's truly) refrain from buying it/cancel reservations.

I will use the dip now to position myself for August-September. For me personally I've often been too quick on the trigger in situations like this, I'll try to buy the dip in portions since it seems to me the month of April may be a bit if a vacuum in which there could be a prolonged dip or just sideways trading around $230. In such a lull there's no stress to buy in, especially options where time value gets cheaper if you wait and also as volatility cools off.

I could of course be completely wrong and we could be at ATH before the summer.

 

[pGo]

Johan, I believe M3 reveal part 2 is happening much closer to production. Correct me if I am wrong.

 

[Johan]

Johan, I believe M3 reveal part 2 is happening much closer to production. Correct me if I am wrong.

That was my reading too, but my thought was they may change that in case they accelerate M3 production schedule.

Tesla have been nimble and quick to change their plans on the fly.

 

[StephenM]

Johan, I believe M3 reveal part 2 is happening much closer to production. Correct me if I am wrong.

You're not wrong

 

[Ulmo]

Tesla Can Hack The Tax Code To Max Out The Number Of People Who Get $7,500 Back, Here's How

I find it amazing the news reports are always months to weeks behind TMC. We figured this out ages ago. The fresh news, though, is that Elon Musk actually agreed to do it. So, perhaps the news reporters were waiting for confirmation that they'd actually do that.

 

[Ulmo]

I don't know if there has ever been this good of an opportunity to buy on a dip after a "miss".

Glad I didn't increase my position yet this week, but I plan to tomorrow. Unfortunately I have limited cash/margin available
In my account and I doubt I can get more money in there fast enough to take advantage of this gift.

Looking at the chart, we're $4.01 above where we were two days ago with a low of 233.25. Also on around March 23rd we were at 215.

 

[Hogfighter]

If they are blaming Hubris, then they should fire him/her.

If someone admits hubris, then learns from it, they should be fired? So he can be replaced by someone who has a completely other set of flaws?

Let's take a step back for a moment. S/X demand is still very strong. They still don't advertise, and still are suppressing X demand.

There has always been, and always will be, production issues. That's the nature of producing things.....and I think Tesla is still learning that regarding guidance. It's also why growing at a rate higher than 50% per year has its pitfalls.

The bottom line is, if you are interested in purchasing the safest car, or the fastest car, or the most technologically advanced car....there's only 2 options: The S or the X.

 

[Ulmo]

Tesla CIO leaves to start his own stealth startup

Is this because of performance, personality, or better opportunities?

 

[Andrei]

Tesla Motors Inc (TSLA) Given New $280.00 Price Target at Credit Suisse

 

[AlMc]

I was not altogether surprised that TM missed Q1 delivery guidance as the X ramp has not gone well. The miss on deliveries will probably guarantee that Q1ER will not be FCF + or whatever Wheeler wants to call it. I am not in the camp that anyone at TM was lying but the 'hubris' around how much new tech/hardware (IIRC the % of parts shared by X and S was very low) was put into the X was a mistake.

Hindsight is '20/20' but they put too much time/manpower/money into an X that would have sold just as well, IMO, if they had a folding second row seat 'option' and more traditional doors. The most compelling reason to buy a TM SUV is because it is a long range EV SUV not because it had FWDoors and sculptured seats. Hopefully EM/TM has learned from this experience and from what we have seen and heard about model 3 it appears they have. IMO, it would be good to have a COO (Wheeler?) who EM will respect/listen to, when needed.

Moving on. I am not sure of the direction (is anyone really?) of TSLA in the short term (this thread). WAG: It will probably meander in the $220-250 (large) range for the rest of April. I don't see a big sell off with the model3 reservation numbers being so strong. So while I personally will not be buying unless we hit the $220s I do not think we see a big dip (200) on the horizon. More likely we have upside to 250 than downside, sub 220. Definitely $250+ IF we get some big news about another factory (be it manufacturing or GF), partnering, cash infusion (that minimizes dilution) to ramp to '3' production earlier than Q4 2017.

While Q1ER may not be good (steak), the CC (sizzle) may be great and has the potential for setting up a run up to ATH AFTER Q2ER/CC which has the potential to be a nice 'beat' on steak and adding additional sizzle.

Long term, this is still a company whose products are compelling/potentially compelling, and one whose products I desire and whose stock I will invest in.

Short term, I will accumulate shares in $220s..if we go there in the scenarios described above. As always, make your own decisions...I have been wrong as often as right, and the 'macros' could be a tail wind or headwind and I am not smart enough to venture an opinion on them.

 

[vgrinshpun]

Tesla Motors Inc (TSLA) Given New $280.00 Price Target at Credit Suisse

Some snippets from the Credit Suisse report, via StreetInsider.com (paywall):

Credit Suisse analyst Dan Galves raised his price target on Outperform-rated Tesla Motors (NASDAQ: TSLA) to $280.00 (from $240.00) despite Q1 deliveries of 14,820 versus 16,000 guidance. The company noted significant Model X component shortages in January and February that lasted longer than the company expected as the key reason for the shortfall.

Galves notes a substantial uptick in production during March happened too late in the quarter to meet guidance, but gives management enough confidence to reiterate full-year guidance of 80k-90k units.

The analyst said details in the press release should mitigate the negative reaction: 1) Model X production reached 750 per week by quarter-end. On the Q4 earnings call in February, Tesla projected that Q2 Model X production would average 700-800 per week and exit Q2 at a 1,000 per week rate. There was a lot of skepticism around that, but based on the release, they are already at the Q2 average; 2) Vehicle orders in Q1 exceeded deliveries by a “wide margin”. Between that and remaining Model X pre-launch backlog still to be filled, we should see a substantial uptick in deliveries during Q2.

The firm is raising Q2 estimates to 19.5k from 18k and maintaining 82k for FY2016.

Galves raises the price target on increased confidence in long-term demand.

"Continued Model S order growth and spectacular interest in Model 3 support our view that demand will continue to outpace production through the fcst period," he said. "This puts Tesla in an enviable position, but significant growth in the shares from here will likely require evidence of earnings improvement and cash burn reduction. In our view, now that Model X production is on-plan, everything is in place for that to happen. We expect some evidence of improvement in Q2, but much more meaningfully in the back-half as overall production increases and Model X inefficiencies diminish."

 

[Drax7]

At AIMC,

you dodged a bullet, good for you.
Don't pretend for one second otherwise.

The best laid out plans go out the window in the heat of the battle.
Leave choreography to dancing, it hardly ever works in trading.

 

[vgrinshpun]

Stifel affirms PT and buy rating, but has some sobering words about the miss:

Stifel affirms its Buy rating and $325 price target on Tesla (Nasdaq: TSLA) following the company's Q1 delivery update issued Monday night.

Analyst James Albertine offered the following commentary: This is a sobering report in light of the impressive orders for the upcoming Model 3, primarily as our recent conversations with investors have centered on TSLA's ability to ramp vehicle production. Having visited the Fremont, CA factory in early March, our sense was Model X production was running at 1 to every 5 or 6 Model S units, which would seem in line with today's report. We believe the average transaction price for the Model S is likely lower than the current Model X units being delivered, which would imply a positive revenue mix shift partially offsetting the lower overall delivery volumes relative to guidance and our expectations, though TSLA will lose of some of that transaction price gain with lower Model X gross margins this early in its product cycle.

While we are somewhat encouraged that TSLA maintained full year guidance (at 80-90k vehicles in 2016), it is hard to see this release as a positive for shares in light of questions involving TSLA's ability to execute. We continue to believe management overshot with the Model X, which appears to us an over-engineered product that will struggle if management cannot find a way to begin taking share at lower price points ($70-90k) vs. the $130k+ level, the analyst noted.

Albertine is lowering his Q1 adjusted EPS estimate to ($0.60) from ($0.33). The firm's Model X delivery target moves from 10,000 units up to 16,400 units for FY16.

 

[vgrinshpun]

Baird's Ben Kallo reiterates PT and Outperform rating (via StreetInsider.com):

Baird analyst, Ben Kallo, reiterated his Outperform rating and $300 PT on shares of Tesla Motors (NASDAQ: TSLA) as the Model X production should overshadow the 1Q delivery miss. Total deliveries were slightly below estimates due to issues with the sourcing of Model X parts. That said, this issue was resolved, Model X production is now higher than expected, and Q1 Model X deliveries doubled our estimate. Additionally, Model S orders remain strong (up 45% y/y) and full-year guidance was reaffirmed.

TSLA announced it delivered 14.82k vehicles in Q1:16 (including 12.42k Model S and 2.4k Model X), below its target of ~16k and our estimate of ~16k. Production/deliveries were impacted by Model X part shortages, although these issues have been resolved. Additionally, TSLA is focused on ensuring no Model III part issues occur to enable a smooth Model III launch when production begins in 2017.

 

[Hogfighter]

Anyone else here feel like we're in 'Waiting for Godot'?

 

[Electrifying]

Super short term 30 minute chart art:

TSLA Technical Analysis

 

[Ukland Wombat]

You're not wrong

I think Musk is being coy here using the word "closer" rather than "close".
The former affords him the chance to bring it on sooner on any plausible tweet of a reason.
I think that within a few days he will announce the date for unveil Part 2.

 

[NOLA_Mike]

As a point of comparison, this morning's premarket volume is <60k shares so far. The day after Model 3 reservations started we traded over 800k premarket.

I think the effect of the delivery miss will be short lived.

 

[Julian Cox]

Just for a bit of perspective. The 1200 cars (Model X) were probably on the production plan and probably produced minus some rubber seals. That would cover why they were not simply substituted with Model S and why they will simply transfer to the Q2 numbers and why whole year guidance is unaffected.

They didn't blame the suppliers they took responsibility for supply chain management. They also had every excuse (except PR management) to go nuts on the Model X design because Model S was pulling the numbers anyway. That is what provided the freedom to go looking for trouble (for example unreliable suppliers) and eliminate it / them in good time for Model 3. This is a significant de-risking excercise for the main event.

As for the Model 3, 1200 Model X shifted from Q1 to Q2 2016 is really cold comfort to an ICE industry gawping at a million customers fleeing for the exits this year, more the next no doubt followed by their former customers dumping a million+ cars per year and rising on the used car market never to return, smashing residual values of ICE vehicles especially hybrids and terrifying prospective new ICE car purchasers accordingly while setting the industry on a cascade collision course with environmental emissions standards - and as I have pointed out before a Sub-Prime leasing bubble that will inevitably implode.

Would you buy a new ICE vehicle or a hybrid now and take on the residual depreciation risk now? No - unless you are mad of course not. If you must have a new car - lease one and leave GM Toyota or Ford standing there carring the baby in three years time. BTW if you happen to have any of these so called blue chip auto makers in your pension plan I suspect that call to your mortgage provider is way more pressing than short term TSLA price movements that change nothing about the outcome for either Tesla or for the ICE industry.

 

[Subhuman]

If someone admits hubris, then learns from it, they should be fired? So he can be replaced by someone who has a completely other set of flaws?

It was a joke as in the persons name was "Hubris" and that person should be fired. Made me laugh!