A new Tesla Motors' analyst is now on the scene...
Bernstein has now initiated coverage on Tesla Motors.
Bernstein's analyst is overall bullish on Tesla long term, but has a few short term concerns, leaving the company with a "market perform" status until they work through the next few months.
In a note to investors titled "Burning Rubber and Burning Cash: The Future Can't Come Soon Enough," the analyst writes:
"We believe that Tesla has three key advantages: (1) a lead in battery technology cost; (2) unparalleled consumer awareness and brand; & (3) vertical integration that is not only brand reinforcing, but creates material cost savings in distribution - collectively these advantages could translate into an 800 bps+ profitability advantage long term vs. traditional OEMs."
"While we are bullish about Tesla's long-term potential, we have several near term concerns, most notably (1) gross margins, as Model 3 and its associated capex ramps up, and (2) Tesla's overall customer experience – which we believe is not strong today – and could be further pressured as the company migrates to selling to a more mass-market consumer. A poor ramp and customer experience on Model 3 could not only impact Tesla's near-term financials, but undermine the franchise longer-term."
Bernstein addresses the overall EV market too, stating:
"The traditional automotive market is being disrupted, and the source of it is one upstart player - Tesla.
We have seen this pattern play out before (with AAPL, NFLX, AMZN), where a single company triggers a sea-change in outlook among consumers and, eventually, among traditional incumbents, who further validate the shift.
In part due to Tesla's catalyzing role, we are bullish on adoption of EVs. Our experience is that consumer technology disruptions occur much more quickly than is typically expected. We believe that EVs could be 40% of the auto market in 20 years and over 50% by 2050."
Source: Street Insider