This Bull Thinks Tesla's Still Charging, Expects Further Slowdown In Model 3 Rollouts

Model 3 deliveries miss aside, Tesla Inc TSLA’s fourth-quarter earnings were unsettling to the company's many haters. Tesla posted record deliveries in the Model S and X, outlined a path to profitability in 2018 and reported encouragingly low cash burn.

The Expert

Loup Ventures managing partner Gene Munster reiterated his bullish perspective on Tesla.

The Thesis

Munster remains confident in Tesla’s electric and autonomous vehicle opportunities, but anticipates a slower Model 3 rollout than previously expected.

The main red flag came in the form of capital expenditure guidance. Management expects acceleration in capex with more than half of the total supporting the Model 3 ramp.

“We believe retooling could cause a temporary step down in production in the fall of 2018, and as a result, are lowering our Model 3 production target to 168,400 from 182,000,” Munster wrote in a Thursday post.

Nonetheless, he maintained Model 3 production estimates for 2019 to 2023 as well as weekly forecasts of 7,150 for the end of 2018.

Additionally, Tesla’s clarified preference for cameras over LiDAR in its autonomous suite bolstered Munster’s confidence in its AV leadership potential.

Price Action

Tesla’s report prompted a 2.7-percent spike in the stock followed by fades of equal magnitude. At time of publication, shares were set to open down 1.3 percent around $340.50.

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