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Tesla (TSLA - Free Report) has once again slipped to a Zacks #5 Rank as earnings estimates got ahead of themselves and then were recently dialed back.

To be fair, this business is quite the moving target for analysts and the variance of outlooks among them is large.

For instance, Bank of America and JPMorgan analysts have price targets of $155 and $195, respectively, while Piper Jaffray and Guggenheim analysts hold $386 and $430 targets.

Further amidst the bulls, it's worth noting that Morgan Stanley just raised their PT from $317 to $379 this month, and long-time faithful bulls at Robert Baird reiterated their $411 target last month.

But one investor towers above them all. Money manager Ron Baron, whose family of a dozen funds oversees $25 billion, has been a long-time Tesla bull and when he made an appearance on CNBC this summer he reiterated his call for TSLA shares to soar...

"I think it is going to be about $500 to $600 next year, and I think it is going to be $1,000 in 2020."

Baron obviously sees Tesla as being a significant force in the auto industry. And he's a savvy long-term investor who is good at spotting consumer and technology trends.

In fact, I followed his lead in Mobileye, the Israeli maker of Advance Driver Assistance Systems (ADAS) machine learning technology, before Intel (INTC - Free Report) bought the company for $15 billion this year.

Let's take a closer look at the near-term doubt about Baron's view.

Where's the Growth?

Some of the bulls had expected Tesla to turn consistently profitable in 2018. Others have anticipated production delays with the new Model 3 and see the company as able to deliver its first profitable year in 2019.

The shifting sands here are typical not only of a new car company but also of one with such a transformational business model.  

What the bulls hope is that Model 3 demand will be strong and that Tesla is able to generate 25% gross margins on the vehicle at a price point in the mid-$40,000s.

Despite the big Q2 earnings beat in August which helped propel shares back to the all-time highs above $385 that were first achieved in June, earnings estimates have been headed down.

Two months ago, the consensus EPS projection for this year was a loss of $6.39. That has since fallen back to ($6.84).

The 2018 consensus dropped from a loss of $1.12 to ($1.23) in the past 60 days.

Oppenheimer analysts felt compelled to drop their 2017 EPS estimate from ($4.95) to ($7.02).

And yet they remain in the camp of seeing a profitable 2018, sticking with their far-above-consensus profit projection of $1.64 next year.

All About the Model 3 Sales

What turns the potential earnings lever into next year to go from a loss of $7 to nearly profitable? The Model 3.

Tesla produced its first Model 3 cars in the quarter and reached 260, which led to 220 deliveries versus Wall Street expectations ranging from 1,000 to 2,000.

As Tesla ramps up Model 3 production to many tens of thousands of cars, revenue growth is expected to skyrocket from this year's $11.89 billion -- already 53.5% growth vs. 2016 -- to $19.64 billion in 2018.

To see why, let's first look at what kind of sales Tesla has in its other models. The company reported 26,150 cars delivered in total in Q2 which was ahead of consensus forecasts. The breakdown among leading cars was 14,065 Model S deliveries and 11,865 of the Model X.

But these are luxury models that could reach some degree of market maturity or saturation in the near future. KeyBanc analysts see that Model S run rates continue to decay while the X appears headed toward a plateau.

Part of Tesla's "master plan" is to reach a much broader market for sustainable transportation with the Model 3, where the company's stated goal is to produce 500,000 cars per year.

Every 100K cars at $44,000 is equal to $4.4 billion in sales. And if the company can really achieve 25% gross margins, the profits will start to flow through to the bottom line.

The key, besides achieving production goals, will be Tesla's Gigafactory and its ability to produce enough low-cost batteries for the Model 3.

Another obstacle down the road will be bringing reliable autonomous driving to the masses as Tesla partners with intelligent computing companies like NVIDIA (NVDA - Free Report) to compete against Intel, Google parent Alphabet (GOOGL - Free Report) , and the Detroit establishment.

So Many Unknowns

Tesla is certainly a company on a mission to change business and technology impacts on society and the environment. And they do make excellent cars that are part of that larger, transformative vision.

But all the unknowns here make it hard for analysts to pin down the growth trajectory of Tesla. Even the optimistic Oppenheimer analysts, who see a potential profit next year, are below consensus on their sales estimates at $10.8 billion this year and just $15.4 billion for 2018.

So while long-term investors may see great value in Tesla now based on the sales outlook, the short-term remains cloudy. Traders should wait for more visibility on company execution and earnings forecasts.

Disclosure: I own NVDA shares for the Zacks TAZR Trader.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

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