Yes, I realize Tesla is known for channel-stuffing at the end of its fiscal quarters, but at this point I don't see any road to achievement of even the low-end of Tesla management’s guidance for 360,000 - 400,000 unit deliveries in 2019--guidance that was reiterated only two weeks ago.
The stock market is coming to grips with Tesla’s core issue: the company is not selling enough cars to turn a profit. It’s that simple. With 2/3rd’s of Tesla’s recent capital raise composed of debt--the company is more leveraged than before the transaction--and another maturity of convertible notes in November, Tesla’s inability to cover its interest expense is glaring.
The Street consensus currently has Tesla posting an EPS loss of $1.63 for the second quarter and a loss of $4.64 for calendar 2019. Based on the April sales figures, I believe both estimates will have to be revised downward yet again. EBITDA forecasts are not as widely published, but the estimates I have seen are in the $2 billion range for full-year 2019, a figure that is similar to the $1.753 billion in EBITDA Tesla produced for the four-quarter period ended March 2019.
There is no room for propaganda with a company that produced negative EBITDA in a period that occurred six-and-a-half years after the introduction of its first product. With last week's offering included, Musk has now raised well over $20 billion since Tesla became a fully-fledged automaker with the introduction of the Model S on June 22, 2012. Tesla's spiraling share price shows that the market, finally, is realizing there will never be real returns on that invested capital.
Tesla is dying a slow death and the industry has noticed. As one of my contacts in the auto supply community noted to me,"the hamster is dead but the wheel is still spinning." Tesla shares have limitless downside here. Be very careful.I have researched stocks for 22 years, starting fresh out of college at Lehman Brothers and then moving to Donaldson, Lufkin and Jenrette. At DLJ I was a Senior Analyst ...
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