NASDAQ: TSLA
COMPANY DESCRIPTION
Tesla, Inc. designs, develops,
manufactures, and sells electric vehicles, and energy generation and storage
systems in the United States, China, Norway, and internationally. The company
operates in two segments, Automotive, and Energy Generation and Storage. The
Automotive segment offers sedans and sport utility vehicles. It also provides
electric vehicle powertrain components and systems to other manufacturers; and
services for electric vehicles through its company-owned service centers,
Service Plus locations, and Tesla mobile technicians. This segment sells its
products through a network of company-owned stores and galleries. The Energy
Generation and Storage segment offers energy storage products, such as
rechargeable lithium-ion battery systems for use in homes, commercial
facilities, and utility grids; designs, manufactures, installs, maintains,
leases, and sells solar energy systems to residential and commercial customers;
and sell renewable energy to residential and commercial customers. The company
was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in
February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo
Alto, California.
RECOMMENDATION
We rate Tesla, Inc. a Buy @ USD 255. Below
are the basic reasons to recommend this stock as a Buy.
·
To deal with the shortage of lithium-ion
batteries, Tesla is focusing on building Gigafactory to produce the batteries
in collaboration with various partners. In July, the company announced its plan
to build a wholly Tesla-owned Gigafactory 3 in Shanghai –first Gigafactory
outside the United States. Further, the company is focusing to grow its energy
storage deployment. In 2018, the company aims to deploy at least three times of
what is deployed in 2017. In December 2017, Tesla installed the largest
powerpack battery in the world in South Australia. With rising capacity for
Powerwall and Powerpack products at Gigafactory 1, energy generation and
storage revenues are likely to grow significantly in 2018.
·
Tesla focuses on expansion of product portfolio,
introduction of car-sharing services and development of self-driving
capability. Tesla has developed heavy-duty trucks, named Tesla Semi, and high
passenger-density urban transport, i.e. minibuses. Tesla unveiled Tesla Semi on
November 16 which will have a transformative impact on its own logistics. Tesla
Semi will be utilized for transportation of Model 3 components from Gigafactory
1 to Fremont.
·
Tesla is developing a compact SUV, to be named
Model Y. The company may launch Model Y in 2020 or late 2019. The company plans
to create an integrated solar-roof-with-battery product for which it acquired
SolarCity. In the long run, it also plans to offer car-sharing services on
autonomous vehicles.
·
Tesla is actively undertaking mergers and
acquisitions to meet its targets and expand its business. The company completed
the acquisition of Grohmann Engineering and expects it to play an integral role
in helping it reach its increased production capacity goals. Further, the
company believes that the acquisition of SolarCity will increase manufacturing
efficiency and lower customer acquisition costs. All these acquisitions are
aimed at converting Tesla into a fully integrated sustainable energy company.
·
Tesla produced 53,339 vehicles in second-quarter
2018. Moreover, the company delivered 22,319 Model S and Model X vehicles, and
18,449 Model 3 vehicles, totaling 40,768 deliveries. The company expects to
produce 50,000-55,000 Model 3 vehicles in third-quarter 2018, marking an
increase of 75-92% from the prior quarter. Model 3 gross margin is likely to
increase to around 15% in the third quarter and 20% in the fourth quarter, due
to an improving mix and a decline in manufacturing costs. Tesla expects to
deliver around 100,000 units of Model S and Model X in 2018, like the
prior-quarter guidance.
·
Although electric cars occupy a small portion of
the global automobile market, Tesla has acquired substantial market share
within this niche segment. Automotive revenues increased around 47% year over
year in the second-quarter 2018. The company is witnessing growing sales on the
back of the strong performance and impressive design of its products. Moreover,
the company has large automakers like Daimler as clients for its electric
powertrain components.
·
Tesla is actively undertaking international
expansion. Since 2013, the company has started selling its vehicles in many new
markets like Europe, China, Japan, Hong Kong, Australia, and Mexico. In Aug
2016, it started taking online orders for vehicles in South Korea. The company
has also begun taking orders in UAE and plans to further expand into Bahrain,
Oman and Saudi Arabia. The company is building its first store and service
center in Dubai and plans to open a store and service center in Saudi Arabia in
2018.
·
Tesla is rapidly developing a network of
Superchargers which charge the battery packs faster than normal electric
charging stations. In 2017, 338 new
Supercharger locations were opened for a global total of 1,128 stations.
Keeping in mind the Model 3 production, the company opened several large
Supercharger stations between Los Angeles and San Francisco and between Los
Angeles and Las Vegas. In second-quarter 2018, the company opened 103 new
supercharger locations, reaching the global total of 1,308.
LAST EARNINGS
Tesla has incurred adjusted loss of
$3.06 per share in second-quarter 2018, wider than the Consensus Estimate of
loss of $2.78. The company reported loss of $1.33 per share in the prior-year
quarter.
Revenues increased to $4 billion
from $2.8 billion registered in second-quarter 2017. The figure surpassed the
Consensus Estimate of $3.8 billion.
Tesla produced 53,339 vehicles in
second-quarter 2018. Moreover, the company delivered 22,319 Model S and Model X
vehicles, and 18,449 Model 3 vehicles, totaling 40,768 deliveries.
Total automotive revenues,
including revenues from automotive sales and leasing, increased 47% year over
year to $3.36 billion in the reported quarter. The rise was due to Model 3
deliveries.
Energy generation and storage
revenues soared from $286.8 million in second-quarter 2017 to $374.4 million in
the reported quarter. The rise was mainly due to considerable growth of
energy-storage deployments.
COMPANY FINANCIALS ( Last 5 years )
|
Year
/ Particulars
|
Yearly
Sales / Revenue
|
Yearly
Gross Income
|
|
2013
|
US $ 2.01 B
|
US $ 456.26 M
|
|
2014
|
US
$ 3.20 B
|
US $ 881.67 M
|
|
2015
|
US $ 4.05 B
|
US $ 933.00 M
|
|
2016
|
US $ 7.00 B
|
US $ 1.57 B
|
|
2017
|
US $ 11.76 B
|
US $ 2.25 B
|
Disclaimer:
Views are strictly personal. This Interim Financial Results & News posts or updates includes forecasts, projections and other predictive statements that represent Vtrade's assumptions and expectations in light of currently available information. These forecasts, etc., are based on industry trends, circumstances involving companies and other factors, and they involve risks, variables and uncertainties. The Group’s actual performance results may differ from those projected in these Interim Financial Results. Consequently, no guarantee is presented or implied as to the accuracy of specific forecasts, projections or predictive statements contained herein.
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