Tesla Inc. posted its largest quarterly loss in company history on Wednesday, falling vastly short of analyst expectations. The red ink was overshadowed by the three-month delay in Model 3 production and massive cash burn.
Tesla shares fell 7 percent on Thursday. Here's how some analysts reacted to the earnings miss:
"While Tesla stock is indicated down afterhours, we're not sure that the [third quarter] print changes the perception around the longer-term tenets of the Tesla story (leading advantages in batteries and tech, etc.), although we think there are a number of issues on those tenets. However, while the manufacturing challenges won't completely shake the 'blue-pillers'/uber-bulls, or even the purple-pillers (those lacking the faith of the uber-bulls, but still long [Tesla] on momentum), it may be enough to reduce patience."
-- Brian Johnson, Barclays
"If Tesla makes good on its revised plan to produce (and deliver) 5,000 units of Model 3 per week anywhere near the latest projected time horizon of the end of [the first quarter of 2018] AND if such production is not accompanied by an increase in cash consumption, we believe the stock will trade materially higher than it does today. However, we acknowledge that it is extremely difficult to forecast with any reasonable degree of accuracy the true pace of progress of moving Model 3 from a position of severe bottleneck to free-flowing production."
-- Adam Jonas, Morgan Stanley
"We see additional capital needs to deliver Model Y by late 2019 (~$3-6bn Gigafactory/assembly plant) in addition to the cash needed to expand its dealerships and charging stations. We remain cautious on [earnings per share] and cash burn, and see rising risks from increased competition (most luxury OEMs are launching EVs in 2018-20)."
-- Colin Langan, UBS
"As expected, [Tesla] is two-to-three months behind schedule for the Model 3, and guided to weak [fourth quarter] gross margin given the Model 3 production ramp, which may pressure shares. Importantly, we believe Tesla has the talent to fix its manufacturing issues, and should hit its targets of several thousand Model 3s per week by [the end of 2017] and about 5k per week by the end of [the first quarter of 2018]. We view this as a core growth stock, and would use weakness as a buying opportunity."
-- Ben Kallo, Baird