The financial situation at Tesla has for years been called its biggest weakness. However, I will explain in this article why I believe financials are a strength for Tesla, and one out of 7 reasons why Tesla will benefit from the crisis.
Below are a number of top takeaways from Tesla’s latest shareholder letter and conference call. Perhaps these thing stood out to you as well. Perhaps they will light a spark in your brain.
After the Tesla earnings call, I was thinking, what has really changed? Sometimes the questions are more important than the answers. Consider what we learn from examining the following questions that most investors had 2 years ago as the Model 3 production ramp began:
Today, we have some interesting information to share with you regarding Tesla analyst price targets for TSLA. Before we get there, however, a bit of backstory: About a month ago, we livestreamed Tesla’s quarterly investor call on YouTube, adding special features like being able to see who was asking questions and what the questions were (written out in text). We even showed a live TSLA stock ticker.
Tesla’s stock is tumbling in the largest decline in TSLA history, and the media is in a frenzy. The headlines on Tesla are starting to include the words such as “troubles,” “struggles,” and even “doomed.” The narrative says Tesla’s demand is falling, its balance sheet is in terrible shape, and Tesla will run out of cash in 10 months. The narrative also claims that Tesla will miss expectations in the second quarter, and one analyst says that Tesla might go to $10/share from the current $190, which is already down >50% from the highs. However, the data show that none of that is true. Tesla’s orders are at an all-time high in North America and worldwide, the balance sheet is the strongest it has been in 6 quarters, and the average 12-month price target among analysts is $276/share, or 46% higher than today’s price.
After the company’s bumpy first quarter, Tesla’s share price has experienced a dizzying rollercoaster ride. All across financial news media outlets, the narrative surrounding the company continues to feed off of FUD (fear, uncertainty, and doubt). And much of it appears to be echoed by Wall Street analysts who cover the stock. Some influential investors, however, see things differently.
The power of denial is an amazing thing. Yes, there is always plenty of debate possible about the value of a company — whether it should be higher or lower. But there isn’t debate about something else — history.
