Red flags are popping up around Tesla, even as the company is expected to report another profitable quarter this week.

A falling share price, expiring electric vehicle credits and a mountain of debt in about five weeks all loom over Tesla as investors wait for its fourth-quarter earnings release after the markets close Wednesday. They’ll be looking to see how the last three months of the year compared to its strong third quarter results, which surprised investors with a profit, better-than expected car sales and faster production of its Model 3 sports sedan.

CEO Elon Musk said earlier this month that Tesla was also profitable on an unadjusted basis during the fourth quarter, although it was smaller than the previous three months. Musk hinted at the results in announcing layoffs of about 7 percent of the company’s workforce, as it struggles to remain “sustainably profitable” as Musk has promised.

“This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit,” Musk said in a Jan. 18 company update.

During the third quarter, Tesla earned $311.5 million in net income. After one-time adjustments, Tesla reported a $516 million profit,Tesla’s third profitable quarter ever.

Shares of Tesla closed at $296.38 a share Monday, down about 15 percent from where they were a year ago. Tesla is expected to report fourth-quarter adjusted earnings of $2.19 a share and revenues of $7.08 billion, based on average estimates of analysts surveyed by Refinitiv.

“We have been fairly alarmed by some of the news flow coming out of Tesla,” said CFRA analyst Garrett Nelson, who has a buy rating on the stock with a price target of $390.

Of particular concern, is Tesla’s recent decision to cut prices across its lineup by about $2,000 to offset the impact of a reduced federal tax credit for electric vehicles. The credit was cut in half from $7,500 to $3,750 starting Jan. 1, part of a plan to phase out the credit for every manufacturer, once a threshold of 200,000 cars sold is crossed.

“I think one of the biggest questions heading into the new year is how is demand going to hold up in the absence of this federal tax credit? Can demand stand on its own two feet? Will consumers continue to buy the Model 3 without that tax credit? We are going to find out real soon,” Nelson said.

Another concern is whether or not Tesla will need to raise more capital, which remains one of the big questions hanging over the stock.

If Tesla were only going to keep selling the three vehicles it has already brought to market, it might be able to do without returning to investors for more cash, as it has already done several times since it went public in 2010, said Morningstar analyst Dave Whiston. “But they have so many gigafactories they have to build, so many vehicles they want to roll out. That takes a lot of money.”

The company is trying to establish a manufacturing presence in China, a solar power and energy storage business to build up.

It also has plans to expand its lineup of vehicles. Tesla is widely regarded as a unique phenomenon in the auto market, with a strong brand, charismatic CEO and cult-like following. But the company’s primary vehicle is a sedan in a market that is turning toward SUVs and crossovers. There are a number of competitors, including veteran automakers, releasing models for both the premium and mass market over the next few years.

Tesla has plans to launch a crossover utility vehicle called the Model Y, but the development and production ramp for the Model 3 suggests that could be expensive.

“Don’t forget there are launch costs associated with the Model Y before you can begin making money off of it,” Whiston said.

Tesla also has about $920 million in convertible debt due March 1. The bondholders can convert the debt into equity if the shares trade at or above the strike price of $359.87. If the shares remain below that price as they are today, Tesla would likely have to pay off the notes with cash.

Tesla probably would have been wiser to raise money last year when shares were trading at a higher price, Nelson said.

“They are kind of in a bind,” Nelson said. “That headwind is very well understood on the street, but it appears from our perspective they kind of made a mistake not raising a capital through an equity issuance when the shares were 20 to 30 percent higher than they are now.”

“That said,” he added, “the stock has sold off sharply since the beginning of the year, and we think the bar has been lowered to a level where there could be a positive surprise on the earnings release. The expectations have been reset.”

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