Now's Not The Time To Own Tesla Stock, Pacific Crest Analysts Warn

• Tesla Motors, Inc. TSLA shares have declined 14.62 percent over the past month, hitting a low of $216.37 on October 14.
• Pacific Crest’s Brad Erickson has maintained a Sector Weight rating on the company.
• With demand trends being mixed and fundamental upside appearing unlikely in 2015, Erickson prefers to stay on the sidelines.
• According to the Pacific Crest report, “Checks indicate that Model X reservations are soft, while Model S demand has picked up since the X launched.” The report also mentioned that the lead times on the Model S remain unchanged, which implies that production is rising.

With the expectations for Q4 set high, Erickson believes that increased production would be critical to meeting these expectations.

Checks with US showrooms suggest that the reservations for Model X have been soft since its launch. Erickson believes that “test drive-ready Model X cars are critical to improve awareness and demand for first-time Tesla buyers, and believe it's unlikely to see these before year-end.”

Recent checks and management commentary suggest that the demand for Model S is increasing. “Amid this higher demand for the S, our checks found that lead times were unchanged, which is generally good and implies higher production and deliveries in Q4,” Erickson stated.

However, the slow start to Model X is a cause for concern, although Erickson believes that he could get more constructive on the stock in early 2016, “with solid execution, an improving gross margin story and Model 3 and Gigafactory as potential major catalysts.”