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Tesla Stocks Plummet After CFRA Review

Last week, Tesla revealed that they had been able to meet their production target of 5,000 Model 3 automobiles. Despite the promising news, a  CFRA Research slammed them because they believe they won’t be able to sustain production levels.

In addition to their woes, Tesla fell short on its 2nd Quarter Deliveries. The car company posted 40,740 vehicles, way below the original Wall Street agreement of 51,000 vehicles

Addressing clients, Efraim Levy, an analyst, mentioned that Tesla had been able to meet its targets a couple of hours after they made an initiative to wrap things up early. By setting timelines, Tesla had been able to meet its targets by producing 5,000 Model 3 sedans in a week’s time. While the news was met with great applause, Levy added that he doesn’t think the production rate is operationally or financially feasible.

Following the review, Tesla shares went down by 2.3%. Prior to that, Tesla’s performance was quite decent with a 5 percent opening on Monday. Levy pointed out his 12-month long price target of $300 for Tesla shares actually accounted for 12.5 % of the downside leading up to Friday’s close.

In the past, Tesla has been unable to meet production targets due to a number of production bottlenecks. However, with the recent progress, the company has not been shy to state that they expect to ramp up production of their famed sedans in the coming month at the rate of 6,000 a week to the general public.

Tesla also confirmed that they had a new outlook when it comes to reporting a net profit. With a positive cash flow in the 3rd and 4th quarters, they expect to be able to make up for lost ground. All this despite the fact that they now face higher tariffs on imports to China and a weakened U.S. dollar.

Path Ahead

Tesla has reported net annual losses since it went public in June 2010

In the stock market, TSLA,-0.91% dipped 1.1 percent in afternoon trades. This activity reversed earlier gains made by about 6.4%. Even with all the developments, the Tesla stock has rocketed by about 34% in the last 3 months. However, the stocks have been down by about 6.1 percent over a 12-month window.

Fellow competitors like General Motors Co. GM, -1.96% have steadily climbed past 13% in the last annum, while Ford Motor Co.’s F, -1.60% had dipped by about 1.8 percent and the S&P 500 index numbers SPX, -0.80% have improved by 12 percent.

Stoking the fire, Elon Musk, the Chief Executive, has come to the fore and expressed his belief that all their targets would be met. He mentioned that all Tesla naysayers would be proven wrong, sooner, rather than later. He posted a cryptic tweet that seemed that seemed to allude to the unity in his company.

In a statement released to the press, Tesla shared that the last 12 months have been the most tumultuous in the company’s history. Still, they insisted that they were remarkably proud of the contributions from everyone in their team. Most especially for meeting the 5,000 Model 3s target. The company further added that it was no mean feat to do so, which made the moment special.


One of the harshest critics, Jeremy Acebedo, a manager at Edmunds – who focuses on the industrial analysis of auto information and research – shared that the very fact Tesla was able to meet production targets should count as a “win” for Tesla. In the same breath, he shared that the challenge now lies in the company keeping momentum.

He’s one of those who pointed out that the tent-like structure was not representative of a company on the up. Irrespective of the negativity around Tesla in recent months, Acebedo noted that the latest milestone was significant since it helped quiet quite a number of naysayers who were skeptical about the company’s approach.

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