Analysts Warn Tesla (NASDAQ:TSLA) May Never Be Profitable

Analysts Warn Tesla (NASDAQ:TSLA) May Never Be Profitable

Analysts Warn Tesla (NASDAQ:TSLA) May Never Be Profitable


Shares of Tesla (NASDAQ:TSLA) fell from record highs Tuesday after an analyst warned that the electric car maker may take longer than expected to become profitable (if ever)

Jefferies analyst Philippe Houchois launched coverage of Tesla with an “underperform” rating, helping send shares of the company headed by rentier huxter Elon Musk down 2.17% to $376.74 after closing at a record high Monday.

“Achievements to-date and vision are impressive, but we do not think Tesla’s vertically integrated business model can be scaled up as profitably and quickly as consensus thinks and valuation multiples imply,” Mr. Houchois warned in a research note.

Mr. Houchois’ 280 price target was well below the median analyst price target of 337.50.

LTN-HeffX’s call is 250/share, and personally, I am and have been for years, calling the company a pure hyped speculative rentier enterprise that will never show a profit and eventually fail.

Mr. Musk is counting on the recently launched Model 3, Tesla’s least pricey car, to make company profitable and establish it as the leading electric carmaker ahead of VW, BMW, General Motors and other long-established carmakers in the micro-mini EV sector.

Retail investor confidence in Mr.  Musk has sent Tesla’s stock up 83% over the past year to record highs.

I believe, and I am not alone,  Tesla’s aggressive production targets are unrealistic, that Mr. Musk is burning through cash fast, and that the company’s electric cars will be overtaken by larger automakers.

8 analysts recommend buying Tesla’s stock, while another 8 recommend selling, and 8 others have neutral ratings, according to the data.

Tesla is 1  of the 10 most poorly-rated stocks in the Nasdaq 100 index.

Symbol Last Trade Date Change Open High Low Volume
NASDAQ:TSLA 376.52 19 September 2017 -8.48 380 382.39 374.27 4,238,376
HeffX-LTN Analysis for TSLA: Overall Short Intermediate Long
Bullish (0.28) Bullish (0.25) Very Bullish (0.53) Neutral (0.07)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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