Tesla Stock Might Fall to $12: Unit Economics Analyst
The auto-maker might see tough times ahead as analysts don't seem to be too hopeful for the future of the stock.
Recently, an analyst at Unit Economics, Nathan Weiss who has started to cover the stock of Tesla Motors again has given a target price of $12 to the stock of the auto-maker. The current share price of the stock is at $115 so the suggested target price by the analyst indicates a decline of as much as 92% which is a massive downside. Mr. Nathan has published a 99-page reported in which he has constantly bashed at the company.
In the report, Nathan has presented each number with a reasonable argument especially the 92% decline in the target price. He has questioned the future of the automobile company on various occasions; furthermore he has referred to Tesla EVs as the least reliable car in the industry. Along with that, he has also talked about the auto-maker’s ability in keeping the investors as well as the shareholders interested in the stock and the company itself – he has raised this concern as the investors has had an issues doing so since the beginning of the business.
Furthermore, he has criticized the company over the gross margin it has earned on its Model S; he has also mentioned that the company plays it smartly by telling the investors that they are quite limited on the production while they heavily promote and sell their cars.
Additionally, another analyst at Barclay’s Plc, Brian A. Johnson has given a rating of Underperform to Tesla stock along with cutting the target price to $165 from an initial target price of $180. On Monday, the stock of Tesla Motors Inc. was closed at a share price of $147 – so in comparison to that the analyst’s rating on the target price still represents an upside of at least 11%. However, the stock of the automobile corporation has fallen by as much as 38% during 2015.
The main concern among the investors, shareholders as well as the analysts, at this point in time, is whether the EV maker will be able to ramp up the production of its Model X. Despite of the fact that the company is working on technological advancement, it seems like the analysts are not happy with the performance of the business. Furthermore, according to reports the EV maker has sued its suppliers due to which the production of the model is likely to slow down production.
Barclay’s analysts is expecting the EV maker to make as many as 14,200 units during the first quarter of fiscal year 2016 while during the fourth quarter of fiscal year 2015 the EV maker produced 17,400 units. However, he seems optimistic on the fact that the stock might just rebound due to the increase in short interest.
Tesla is recently working on the launch of Model 3, which was supposed to be launched in March but Johnson has his doubts as he believes the production might just start sometime in late 2017. According to analysts at Wall Street, the operating revenue might increase by 89% to an amount of $1.80 billion; additionally EPS for the fourth quarter is likely to be seen at $0.08.
