Analyst Points Out That Tesla Has Reached A “Pivotal Inflection Point”

DEC 17 2018 BY EVANNEX 14


Tesla is a polarizing stock on Wall Street. There are plenty of bulls and bears that work hard to make their case. However, there’s a new Wall Street analyst covering Tesla [NASDAQ: TSLA] who’s enthusiastic about the company’s potential but warns of great volatility ahead. According to CNBC, “Wedbush Securities began coverage of Teslashares on Friday with an outperform rating.”

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: The road ahead for Tesla will have twists and turns (Instagram: garyqian)

“Tesla has evolved into one of the most dynamic technology innovators over the last 30 years and, in our opinion, has put itself into an esteemed category of companies such as Apple and Amazon that have revolutionized consumer buying habits and behaviors over the last decade,” Wedbush analyst Daniel Ives said in a note to investors.

According to Ives, “a technology titan over the coming years despite the near-term turbulence… Seeing the forest through the trees we believe Tesla has the most innovative product roadmap in the technology space over the next 5 to 10 years.”

Above: Wedbush Securities Analyst, Daniel Ives, sees this as a ‘pivotal inflection point’ for Tesla (Youtube: CNBC Television)

As reported in Business Insider, Ives notes, “While there will be speed bumps along the way, we believe getting worldwide production annually to between 750k and 1 mm units by 2020 is an achievable target that will further bolster the Tesla growth thesis for the coming years.” He adds, “Over the next 5 to 10 years, a more efficient production ramp and process will enable Tesla to see a discernible jump in profitability and margins.”

Ives emphasizes that, “this will be a bumpy road… [but] we believe Tesla has a golden opportunity to ramp Model 3 unit sales in 2019 and beyond and thus translate into massive FCF and profitability as we look out into 2022-2030 based on [Wedbush Securities] detailed auto unit analysis.”

Above: Tesla’s Model 3 (Instagram: voyagewithoutcarbon)

Smarter Analyst reports on the analysis specifics provided by Wedbush Securities. And it turns out, Ives views “Tesla as a disruptive technology vendor along the likes of Apple, Google, and Amazon and believe[s] a triangulated, longer term valuation approach for Tesla is more accurate to capture the intrinsic value in this innovative technology roadmap. To this point, looking out a more normalized model with $22 of earnings power by 2025 and our FCF projections of $5 billion by 2025 we believe a valuation of $440 per share is fair for Tesla.”


Source: CNBCBusiness InsiderSmarter AnalystCNBC Television

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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14 Comments on "Analyst Points Out That Tesla Has Reached A “Pivotal Inflection Point”"

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It doesn’t make sense to compare Tesla to Amazon. Amazon sells products designed and manufactured by other companies. You might as well compare Tesla to Wal-Mart or McDonalds.

how about AWS and Amazon devices?

Amazon can be compared because, like Tesla, they focused on MASSIVE growth, combined with heavy automation.

Analysts, what would we do without them.
It’s like the old joke what are you waiting for when you have a 100 analysts up to their necks in concrete.
The last load of concrete.

Are the “analysts” ever going to get to a point where they say any company is NOT at a “tipping” point? For Tesla, it was when the Model S was about to launch, it’s make or break. When the Model X was coming out, can they handle doing two cars at once. When the Model 3 was coming out, can they produce enough to satisfy the people in line. It just never stops with these people.

They all were true

> Tesla is a polarizing stock on Wall Street

I’ve said it before and I’ll say it again, Tesla is a real-world Rorschach test. How you interpret news about them says more about the person making the interpretation than it does about Tesla themselves.

Those who love Tesla simply can’t see anything bad about them; no matter what news come out, it can be deflected. Likewise, those who hate them seem incapable of reading anything positively or of changing their opinion. There don’t seem to be many people in the middle-ground.

In addition, both groups have a strong tendency to cherry-pick their news in order to re-inforce their own biases, and even to create news about Tesla that feeds into their own viewpoint.

Both groups are backed by traders with large amount of money and big reputations. Both are able to make compelling arguments to back up their case. But in the end, one of these groups is going to turn out to be wrong and will lose their shirts. It’s been going on for a long time and I suspect it will continue for some time yet to come.

LOL. You proved your Rorschach test point. — Irony.

Like everyone, I have my own biases and opinions. I tried to be evenhanded with my comment above, so if you can see a bias coming through then yes, it does kinda prove my point. Reading back though, I can’t see the bias, so I’d be interested to know what bias you saw? (because maybe that proves my point? 😉 )

High tech stocks have high P/E ratios based nearly exclusively on potential and hype.
Manufacturing stocks, and especially auto manufactuers, have low P/E ratios.
Analysts must struggle with placing Tesla in a place that blends the two.

Tesla should no more be blended than Amazon should be a blend of a retail store and tech.

Tesla will do the same thing to traditional heavy manufacturing that Amazon did to traditional retail.

Brains win.

Seems like the shorts get an unlimited timeframe deadline. The bar keeps moving, remember when they said Tesla will n ever be able to make or sell the Model S, said the same for Model X, and said the same for the Model 3…) Bankruptcy is always around the corner even when Tesla makes a profit! Tesla is through production hell, has 3 high quality cars and has a deep product pipeline. Tesla has EU and China market to sustain it for 2019. Shorts can always come up with something to worry about next, what they can’t do is add any value to our economy!

750-1million unit production “by 2020”. I don’t see Tesla tooling up to double production, again, within 13 months. I see a company aiming not to raise equity, being sheepish about too much debt funding, and otherwise looking to finance its growth with automotive margins. Just my two cents, from deep inside the concrete.

They already got funding in China.
Growth in the next 12 months would come in China
2020 will see Model Y ramp which would be faster than Model 3