Tesla Still Struggling With Production, But Skies Are Beginning To Clear

Reservation Update

Tesla Still Struggling With Production, But Skies Are Beginning To Clear

As expected, adjusted loss per share widened significantly.

Demand for Tesla's vehicles continues to be strong. Tesla reported an EPS loss of $-2.92, falling short of Thomson Reuters analysts' estimates of $-2.29. Battery pack sales (including stationary storage Powerwalls and grid-tied Powerpacks) brought in $317 million in revenue, but the sector only cost the company $237 million.

Tesla's "primary production constraint for the Model 3 has been in the battery module assembly line at Gigafactory 1, where cells are packaged into modules". Specifically, it expects a non-GAAP automotive margin in Q4 of about 15%.

Tesla had cash and cash equivalents of $3.53 billion as of Sep 30, 2017 compared with $3.39 billion, as of Dec 31, 2016.

"Tesla needs to slow down and more narrowly focus its vision and come up for a breath of fresh air", said a note from Cowen and Co. after the third-quarter earnings were released. In the third quarter alone, it spent $1.1 billion in capital expenditures.

In third-quarter 2017, Tesla opened 18 new stores and service locations and added 126 new Supercharger stations.

As for Musk's Model 3 "production hell", a caller asked him to rate where Tesla is on a scale of 1 to 10.

Baird analyst Ben Kallo is still a believer in the company, so he reiterated his Outperform rating and $411 price target for Tesla Inc (TSLA) stock following the results, and he's not the only one to hold steady. There's still little indication of when the product might roll out.

It looks like it's mainly those with already the earliest possible delivery dates that are most affected as Tesla is still hoping to get to significant production volumes by the end of the year and then ramp up to 5,000 units and 10,000 units per week next year. Tesla's third quarter report shows they are producing a record number of Model S and Model X cars.

For its fourth quarter, Tesla maintained its guidance to deliver about 27,000 combined Model S and X deliveries. "Discussion of future cash flow was characteristically vague but the CFO emphasized that the eventual Model 3 ramp will be accompanied by substantial operating cash flow".

For example, this one is from a reservation holder who previously had the earliest possible window of "Oct 2017 to Jan 2018" available for the "first production" vehicles.

Despite drama from Tesla's automotive sector, Tesla Energy seems to be paying off for the company. BWA and Ford Motor Company F, each carrying a Zacks Rank #2 (Buy).

Several other research analysts have also recently commented on the company.

BorgWarner has an expected long-term growth rate of 9%.

There are numerous indicators we can use to give us a better idea about a public company's financial health.

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