Tesla Analyst Says 'This Quarter Was Nothing To Write Home About' But Won't Stop Momentum

Tesla, Inc. TSLA reported record deliveries for the September quarter, which however came in below estimates of most analysts.

Logistical Speed Bump, Ives Says: Tesla clearly had delivery challenges in the quarter, with some isolated soft spots in China, Wedbush analyst Daniel Ives said in a note.

“While the reasoning (in the PR) from Tesla makes sense on paper, the Street will not be convinced,” the analyst said. He sees investor worries about demand issues persisting until Tesla issues year-end unit guidance at its Oct. 19 earnings call.

Ives said he believes the unit set-up into the fourth quarter is very robust and could approach massive numbers in the 475,000+ range.

“In a nutshell, this quarter was nothing to write home about and the Street will be disappointed by the softer delivery number in 3Q,” Ives said.

He, however, viewed the third-quarter softness as more of a logistical speed bump rather than the start of a softer delivery trajectory into the fourth quarter or 2023.

Wedbush’s Ives maintained an Outperform rating on Tesla shares and a $360 price target.

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Growth Story Is Intact: Munster: Loup Funds’ Gene Munster said he is buying the company’s explanation that more vehicles were in transit than normal at the end of the quarter and that they will show up in December numbers.

The 343,000 cars Tesla delivered represented 42% year-over-year growth, and the growth rate, Munster said, would be twice better than the rest of the industry.

“The Tesla growth story appears intact,” he added.

Musk Chimes In On End-of-Quarter Rush: With Tesla discussing logistical issues in the deliveries update, CEO Elon Musk offered his thoughts on the end-of-the-quarter rush.

A Twitter user going by the handle @WholeMarsBlog said the end-of-quarter delivery wave is bad for the team and customers, and wasn’t cost-effective either. He also said a more steady mix of deliveries throughout the quarter would be great, and expressed hope that the Berlin and Austin factories will make this easier as they ramp.

In reply, Musk said, "Customer experience suffers when there is an end of quarter rush. Steady as she goes is the right move."

Tesla closed Friday’s session at $265.25, down 1.10%, according to Benzinga Pro.

Photo: Courtesy of tesla.com