Andrea James has been one of the top Tesla analysts on Wall Street in the past several years. As she noted in a blog post yesterday, though, she was not going to be asking questions on the Tesla conference call last night for the first time in 21 quarters.
“Wowza, what happened?!” Well, the 34-year-old who had been working for Dougherty & Company since 2009 decided to take on a new challenge, founding Solve for X Coaching (h/t “geneclean55“). But she also decided to go out with a bang.
Jumping down to the chase, the key thing is that this lady, who had dug into Tesla’s financials and manufacturing process more than all but a few people (… if that), was finally allowed to but TSLA shares (which she couldn’t do while working as an independent analyst for Dougherty & Company). I think you know where this is leading. Here’s the punchline: “I can’t wait to buy in.”
But I encourage you to take a bit more of your time to read these segments from Andrea:
Being a Wall Street stock analyst on Tesla Motors (TSLA) shares from 2010 to 2016 has greatly enriched my life and understanding of the world. I took pride in the depth of my analysis and research — I always started from a position of skepticism and asking, “Where could Tesla go wrong?” But early on, it became clear that the bigger question — the world changing one — was, “Where could Tesla go right?”
My firm gave me the opportunity to call the truth on Tesla as I see it. And we get to that truth by analyzing the following three questions, at their simplest: Does Tesla have a technology lead that is real? Can Tesla build it? Will people come?
Answering those questions took me on a journey into researching battery pack manufacturing, touring battery manufacturing competitors, creating relationships with suppliers, and constantly talking with industry. My financial model, which I built from scratch, modeled out Tesla revenue and expenses for the next several years at a granular level — even at some points analyzing the costs of a lithium-ion battery down to the cathode, anode, electrolyte and separator. I have written volumes of research for Wall Street clients addressing Tesla-related topics. Unfortunately, that research is not available to the general public and was shared only with firm clients.
Does Tesla have a technology lead that is real? Can Tesla build it? Will people come?
Yes, yes and yes.
As I said at the top, Andrea has been one of the best Tesla analysts on Wall Street. As a Tesla fan and TSLA shareholder, there must be some bias in there, but the fact of the matter is that TSLA has risen from $20/share in 2010 to $222/share today, and Tesla just moved its 500,000/year production target from 2020 to 2018 on the back of an obscene number of Tesla Model 3 reservations.
Again, on the conference call last night, Elon gave subtle but clear indication that Tesla seems to be far ahead of any company in bringing down EV battery prices, the essence of bringing down electric car prices. He also noted Tesla’s ability to move faster than any of the large automakers, something anyone who studies startups vs large corporations should know well.
For the past several years, there have been naysayers at every step claiming that Tesla was on the verge of failure and would be bankrupt soon. Well, there were some tough times where that wasn’t far off, but Tesla got through them, and I think you have to be quite the pessimist to fall in that camp today. When asked specifically about when naysayers like Bob Lutz and Jim Chanos would come along, Elon laughed last night that there will always be naysayers, and some will say it’s “impossible” until it’s done … and then some of those people will say it was “obvious” that it would happen, ironically.
Andrea James, starting out as a strong skeptic, obviously isn’t one of those naysayers. After doing her homework much better than most of these analysts do, studying Tesla in greater depth than almost anyone has the time and resources to do, she is apparently a Tesla fangurl. I’d take that as a sign if I still fell into the skeptics camp.
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