Tesla gets vote of confidence over FSD tech, board updates in run-up to Q1 earnings


Tesla (NASDAQ:TSLA) might be attracting a notable degree of skepticism as it heads towards its first-quarter earnings call, but the company is still receiving support from one of its biggest bulls. In a note following Tesla’s Autonomy Day, Canaccord analyst Jed Dorsheimer highlighted the electric car maker’s lead in the EV market, as well as the potential of its full self-driving technology.

Dorsheimer reiterated his “Buy” rating and his optimistic $391 per share price target for Tesla. According to the Canaccord analyst, if Tesla rolls out its autonomous driving software in a timeline that’s close to its targets, the company will have a formidable lead against its rivals in the FSD sphere. “We continue to see Tesla as the clear leader in EVs, and if anything remotely close to the timeline for Level 5 capabilities that the company has laid out occurs, the formidable lead that the company has in autonomy will result in meaningful market share gains,” he said.

The Canaccord analyst also noted that Tesla’s decision to reduce the members of its board of directors from 11 to 7 could be seen as a sign that the company is developing a more balanced corporate governance, considering that the three outgoing board members are widely considered as having close ties with Elon Musk.

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Other analysts are not as optimistic. Garrett Nelson, an analyst with CFRA, has noted that Tesla’s Q1 earnings could be an “outright disaster,” considering that Elon Musk himself mentioned a potential loss as early as the end of February. “Our suspicion is that Q1 EPS could be an outright disaster, given that Tesla guided for a loss with an entire month left in the quarter, and its inherently high degree of operating leverage. We know what Q1 deliveries were, but how did average price realizations and unit costs hold up amid its announced price cuts and a reduced mix of higher-priced Model S and X vehicles?” Nelson said.

Karl Brauer, an analyst with Kelley Blue Book, also shared his reservations about the company, including concerns about the increasing competition from rival automakers. “That’s good news for the consumer, but not so good for Tesla. The increased competition will make it difficult for Tesla to assume they can build as many cars as possible and there will always be a customer waiting to buy them, as the market saw with the first-quarter delivery miss,” he said.

Expectations are tempered for Tesla’s first quarter results, with Wall St. looking to a quarterly loss of $1.84 per share based on standard accounting methods and a non-GAAP loss of $0.99 per share on revenue of about $5.46 billion, according to FactSet.

Tesla shares have been off around 20% this year so far, compared to a roughly 16% rise for the broader S&P 500.

Tesla will be releasing its first quarter financial results after markets close today, April 24, 2019. The company’s earnings will begin at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time). Tesla’s financial report for the first quarter can be accessed here.

As of writing, Tesla shares are trading up -0.68% at $262.11 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Tesla gets vote of confidence over FSD tech, board updates in run-up to Q1 earnings


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