Tesla Inc TSLA Technical analysis

Accuracy score :
97%

Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars. The Tesla Roadster debuted in 2008, Model S in 2012, Model X in 2015, and Model 3 in 2017. Global deliveries in 2017 were 103,184 units and the company says that its plan to increase production to 500,000 units in 2018. Tesla went public in 2010 and employs about 40,000 people. All Tesla vehicles are produced at its factory in Fremont, California, where the vast majority of the vehicle’s components are also made.

To create an entire sustainable energy ecosystem, Tesla also manufactures a unique set of energy solutions, Powerwall, Powerpack and Solar Roof, enabling homeowners, businesses, and utilities to manage renewable energy generation, storage, and consumption. Supporting Tesla’s automotive and energy products is Gigafactory 1 – a facility designed to significantly reduce battery cell costs. By bringing cell production in-house, Tesla manufactures batteries at the volumes required to meet production goals, while creating thousands of jobs.

Summary (from the latest annual and quarterly report )

  • Total equity: 3.9 billion USD
  • Market Cap is 44.6 billion USD (the last price of the stock is 261.95 USD)
  • Tesla Motors Inc designs, develops, manufactures and sells high-performance fully electric vehicles and electric vehicle powertrain components. Tesla also manufactures equipment for home and office battery charging, and has installed a network of high-powered Superchargers across North America, Europe and Asia
  • Equity of total company has decreased from 4.75 billion USD in 2016 to 3.9 billion in 2018
  • The company has 2.23 billion USD in cash on the account (from latest quarterly report  2018)
  • Total equity – cash on account = 3.9 billion USD – 2.23 billion USD = 2.67 billion USD
  • In 2018 the company has 9.5 billion USD long-term debt, short-term debt is 2.1 billion USD                                                               (In 2016 company had 5.97 billion USD long-term debt, short-term debt was 1.15 billion USD)
  • Company's revenue has increased in 2017 to 11.75 billion USD from 7 billion in 2016
  • Net loss in 2017 was 1.96 billion USD, Net loss in 2016 was 675 million USD

 

Technical analysis

TSLA  has seen its stock price go down by more than 30% since the peak reached in June 2018. Tesla shares are also dropping every time Elon Musk tweets and Tesla's board has to do the responsible thing here in my opinion. It is important to say that TSLA's revenue has increased in 2017 to 11.75 billion USD from 7 billion in 2016 and the company says that its plan to increase production in 2018. As Gigafactory ramps production, Tesla's battery business will quickly become one of the company's most exciting growth initiatives. Musk has said that batteries could be as big of a business as cars in the future. As Tesla continues to improve its battery technology, reducing costs and improve supply (as Gigafactory 1 output ramps), revenue from energy storage will continue to grow exponentially going forward. Despite all of this, I can't recommend it as a buy - cash burn raising concerns, the company is still not profitable and I think that they will have problems with liquidity in the future. The negative sign is that several big banks reduce Tesla to SELL and lowers its price target to under $200. Cash flow and profitability are certainly not the same things, but the capital requirements to build new factories and deploy new products to continue demonstrating growth are going to be in the billions. Tesla is going to need to continue to raise capital, via equity or via debt to keep the growth story going. The growth is already priced in, and the ability to access capital markets is not a given. If Tesla cannot continue to show growth, the share price will likely take a beating.

On this chart (the period from June 2010), I marked resistance and support levels. Supports levels are 250 USD and 200 USD, 300 and 350 USD represent the current resistance levels. If the price jumps above 300 USD it would be a "BUY" signal and we have the open way to 320 and then to 350 USD. Rising above 350 USD supports the continuation of the bullish trend overview efficiently for the upcoming period. On the other side, 250 and 200 USD represent very strong support levels, if the price breaks 200 USD it would be a very strong "SELL" signal and we have the open way to 150 USD.

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