Tesla Makes Progress but Has a Long Road Ahead
We still think the stock’s overvalued.
Tesla (TSLA) reported a first-quarter adjusted loss of $3.35 per share, beating consensus of a $3.48 loss. Total company revenue increased 26.4% year over year (up 3.7% sequentially) to $3.4 billion, beating consensus of $3.2 billion. We are leaving our fair value estimate in place but will continue to monitor Model 3 deliveries and adjust our vehicle delivery projections, which can affect our valuation. We think the long-term story on what Tesla can achieve in electric cars, trucks, mobility, and energy generation and storage will ultimately determine the value of the company. We believe the stock trades on option value that, if realized, is still many years away, and therefore we do not think any single quarter’s results are critical to the investment thesis.
Vehicle deliveries increased year over year by 19.7% to 29,997, with the Model 3 sedan constituting 8,182 of the total. Management continues to expect a Model 3 weekly production rate of 5,000 in about two months’ time. Tesla Energy’s revenue nearly doubled year over year to $410 million, with storage revenue growth of 161% more than offsetting a 50% decline in energy generation megawatts to 76 MW. Also encouraging is cash sales’ continued increase as a percentage of total residential solar deployments (66% in first quarter versus 54% in fourth quarter and 31% in the first quarter of 2017), which helps cash flow compared with the old leasing format under SolarCity.
David Whiston does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.