Tesla: Get Ready For Another Profitable Fourth Quarter by Victor Dergunov

Summary

Tesla has been on fire lately (in a good way), appreciating by roughly 125% from its mid-year lows.
Despite some weakness in the first two quarters of 2019, Tesla delivered an outstanding Q3, and Q4 is likely to be even more profitable.
Tesla's Gigafactory in Shanghai is already rolling out Model 3s and the company is planning to start construction on its next Gigafactory in Europe in 2020.
The company is positioning itself to produce up to 1.5 million vehicles annually within the next 5 years or so.
Revenues, efficiency, profits, and the company's share price are likely to increase substantially in future years.
This idea was discussed in more depth with members of my private investing community, Albright Investment Group . Get started today »

TeslaSource: CNBC.com

Tesla: Brace Yourselves For Another Profitable Quarter

Tesla (TSLA) has been on fire lately (in a good way), as the stock charged through to new all-time highs above $400 in recent trading sessions due to increased optimism and various positive fundamental developments. In fact, shares are now up by about 125% since my “Tesla: In the Buy Zone Now” article was released in late May, and are likely going substantially higher over the intermediate and long term.

Tesla 1-Year Chart

Source: StockCharts.com

On a side note, Tesla's chart now looks massively overbought, and if I were a short to intermediate term trader, I would be taking profits, hedging, selling calls, or possibly even shorting the stock here. The black candle on Friday looks particularly bearish and a temporary reversal looks likely from here. Nevertheless, long-term the stock is still likely going much higher.

Now, back to the analysis:

Tesla’s stock temporarily dipped under the $200 level due to a “worse than expected” Q1. The company lost a staggering $702 million in the first quarter, followed by another significant loss of $408 million in Q2. Thus, it is understandable that the stock has been volatile, and shares were under some temporary pressure throughout parts of 2019.

Nevertheless, and despite such losses, the company’s cash position remained strong throughout the year, the high Tesla vehicle penetration rate in the U.S. appears to be a transitory phenomenon, the Chinese Gigafactory is already rolling cars out in China, Tesla is planing to start building its next Gigafactory in Europe (Germany), the company has a very strong pipeline filled with remarkable new vehicles, Q3 financial results were much better than anticipated, and Q4 will probably be another extremely profitable quarter for Tesla.

Therefore, while there is a good possibility that Tesla shares may correct, and/or go through a consolidation phase in the short term, I expect the stock can continue to move much higher long term. As Tesla continues to increase sales, improve production efficiency, continues to build its revolutionary ecosystem, and resumes to capture substantial market share in the global vehicle market, the stock should proceed appreciating long term.

So, What Will Q4 Look Like?

Tesla sold roughly 255,200 vehicles in the first 3 quarters of 2019. It’s also important to mention that deliveries in Q2 and Q3 were roughly 50% above Q1. This tells us that Tesla can scale production extremely well and demand remains robust for Tesla vehicles despite the lackluster results we witnessed in the first quarter.

...Read the Full Post On Seeking Alpha

Author Bio:

Steem Account: @victordergunov Seeking Alpha Account: Victor Dergunov Twitter Account: @victordergunov

Steem Account Status: Unclaimed***

Are you Victor Dergunov? If so, you have a Steem account that is unclaimed with pending cryptocurrency rewards sitting in it from your content. Your account was reserved by the Steemleo team and is receiving the rewards of all posts syndicated from your content on other sites.

If you want to claim this account and the rewards that it has been collecting, please contact the Steemleo team via twitter or discord to claim the account. You can also view the rewards currently sitting in the account by visiting the wallet page for this account.

What is Steemleo Content Syndication?

The Steemleo community is syndicating high-quality financial content from across the internet. We're also creating free Steem accounts for the authors of that content who have not yet discovered the Steem blockchain as a means to monetizing their content and we're listing those accounts as the 100% beneficiaries to all the rewards. If you want to learn more about Steemleo's content syndication strategy, click here.

Posted via Steemleo | A Decentralized Community for Investors