Tesla Inc. (TSLA - Free Report) plans to raise $1.5 billion, through the offering of senior notes due 2025. The company intends to use the proceeds of this notes offering to support the production of its latest Model 3 sedan and other corporate objectives.
In the second quarter, Tesla made total cash investment of $1.16 billion for development of Model 3’s capacity and to amplify its battery output. Launched in Jul 2017, the price of the new sedan vehicle starts at $35,000.
The company aims to steadily speed up Model 3 sedan’s production to 1,500 vehicles in third-quarter 2017 and achieve a run rate of 5,000 units per week in 2017 and 10,000 vehicles per week in 2018. Also, Tesla expects a positive gross margin in fourth quarter and sets a target margin of 25% in 2018 from the newly-launched model.
Tesla Inc. Price and Consensus
Til now, the company has been raising funds through a combination of equity and convertible bonds offering, which in due course, gets converted into shares. In March, it raised $1.4 billion through convertible notes.
Tesla is aggressively working toward expanding its product portfolio to boost sales. Prior to the Model 3 launch, the company unveiled a series of new Model S and Model X versions with 100 kWh batteries last August.
However, Tesla’s heavy investments to increase production capacity, develop Model X and Model 3, construct Gigafactory and expand sales volume, plus enhance services and the Supercharger infrastructure are all escalating its capital expenditure. For second-half 2017, Tesla estimates capital expenditure of around $2 billion.
Price Performance
Tesla’s shares have surged 31.9% in the last six months, substantially outperforming the 4.8% increase of the industry it belongs to.
Zacks Rank & Key Picks
Tesla currently carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks are Fox Factory Holding Corp. (FOXF - Free Report) , Cummins Inc. (CMI - Free Report) and Ferrari N.V. (RACE - Free Report) , all currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fox Factory has a long-term growth rate of 15.9%.
Cummins has an expected long-term earnings growth rate of 12.1%.
Ferrari has an expected earnings growth rate of 14.1% over the long term.
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This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Tesla Inc. (TSLA - Free Report) plans to raise $1.5 billion, through the offering of senior notes due 2025. The company intends to use the proceeds of this notes offering to support the production of its latest Model 3 sedan and other corporate objectives.
In the second quarter, Tesla made total cash investment of $1.16 billion for development of Model 3’s capacity and to amplify its battery output. Launched in Jul 2017, the price of the new sedan vehicle starts at $35,000.
The company aims to steadily speed up Model 3 sedan’s production to 1,500 vehicles in third-quarter 2017 and achieve a run rate of 5,000 units per week in 2017 and 10,000 vehicles per week in 2018. Also, Tesla expects a positive gross margin in fourth quarter and sets a target margin of 25% in 2018 from the newly-launched model.
Tesla Inc. Price and Consensus
Til now, the company has been raising funds through a combination of equity and convertible bonds offering, which in due course, gets converted into shares. In March, it raised $1.4 billion through convertible notes.
Tesla is aggressively working toward expanding its product portfolio to boost sales. Prior to the Model 3 launch, the company unveiled a series of new Model S and Model X versions with 100 kWh batteries last August.
However, Tesla’s heavy investments to increase production capacity, develop Model X and Model 3, construct Gigafactory and expand sales volume, plus enhance services and the Supercharger infrastructure are all escalating its capital expenditure. For second-half 2017, Tesla estimates capital expenditure of around $2 billion.
Price Performance
Tesla’s shares have surged 31.9% in the last six months, substantially outperforming the 4.8% increase of the industry it belongs to.
Zacks Rank & Key Picks
Tesla currently carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks are Fox Factory Holding Corp. (FOXF - Free Report) , Cummins Inc. (CMI - Free Report) and Ferrari N.V. (RACE - Free Report) , all currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fox Factory has a long-term growth rate of 15.9%.
Cummins has an expected long-term earnings growth rate of 12.1%.
Ferrari has an expected earnings growth rate of 14.1% over the long term.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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