By CCN: Everyone is running out of patience with Elon Musk and his antics as the CEO of Tesla. Following the company’s spectacularly disappointing earnings report, Goldman Sachs and Wedbush downgraded Tesla’s stock on Thursday.
The downgrades weren’t a surprise given the dismal numbers Tesla reported. However, the scathing lashing given out by the Wedbush analyst did take some aback.
THE RESEARCH NOTE THAT COULD MAKE HISTORY
Clearly frustrated with Musk, Wedbush analyst Daniel Ives’ note to investors was part venting, mostly true, and should be a scream to Musk to get it together.
“In our 20 years of covering tech stocks on the Street we view this quarter as one of top debacles we have ever seen while Musk & Co. in an episode out of the Twilight Zone act as if demand and profitability will magically return to the Tesla story.”
The analyst went on to describe a “demand story at Tesla” that is evolving. Unfortunately, the company has not been able to adjust.
“We no longer can look investors in the eye and recommend buying this stock at current levels until Tesla starts to take its medicine and focus on reality around demand issues which is the core focus of investors.”
With that said, the firm lowered its rating to neutral from outperform. It smashed the price target to $275 from $365. While it had been comfortable with its price targets, this last quarter was too much.
TESLA’S FUNNY MATH
Goldman Sachs cut its price target to $200 from $210. It maintained its sell rating.
In its note, Goldman Sachs analyst David Tamberrino raised concerns about the Tesla’s guidance numbers.
“Ultimately, we believe the company’s ‘if we build it, they will come’ mantra likely requires incremental incentives (or some form of this) in order to entice incremental sales – which also will weigh on gross margins.”
WORST QUARTER EVER
Tesla reported a loss of $702 million in the quarter. Its loss per share was $2.90, which was far more than the $0.69 analysts had expected.