20 days ago
Tesla: More Questions Than Answers?
Tesla (TSLA) released its deliveries update after the close on Monday, and it was a report that provided ammunition for the bears at Goldman Sachs, who cut their price target, and was explained away by the bulls at Guggenheim. Well, Bernstein's Toni Sacconaghi and Daniel Chen contend that "Tesla's Q2 production and deliveries report raised more questions than answers, particularly about Model S and X demand." They explain why: Uncharacteristically, Tesla did not provide in-transit vehicle sales, but based on commentary in the press release, we suspect that Tesla's owned inventory increased materially for the 3rd straight quarter and may now be over 13,000 units, or ~7 weeks, or perhaps 45 cars per sales and service outlet. While the inventory build may be prudent and desirable for sales and services purposes, we do note that inventory appears to have more than doubled over the last three quarters, while sales have been flat and customer deposits (a good proxy for customer orders) have declined... In addition to Tesla not providing a vehicle in transit figure, the company's delivery report raised several other questions: (1) Why did Tesla put out the release after the market close on the eve of a holiday?