Tesla (TSLA, +0.5%) mega-bear Gordon Johnson reiterates his thesis that Tesla’s valuation is “detached from reality” and warns the corporate will “hemorrhage cash” in H2 and accused it of “accounting chicanery”.
Johnson, founding father of GLJ Analysis, has a price goal of $87 on the stock and tells Bloomberg TV that Tesla is “a company that’s benefitting significantly from regulatory credit sales”.
“This quarter they sold $428M in regulatory credits, which is 100% net margin a benefit, vs. net income of 104M. The point is if you exclude those regulatory credit sales over the past 26 quarters, in only 4 of those quarters, the most recent of which is 3Q ’19, has Tesla made money.”
“Effectively their revenues, if you look at their total revenue, peaked in the fourth quarter of ‘18. If you look at their deliveries … (this) was not a record this quarter and we think the company is going to go back to hemorrhaging cash in Q3 and Q4.”
Tesla whole income by quarter
“They aggressively recognized regulatory credit revenue that no one has yet purchased and they have not yet sold, so this is in receivables the past two quarter to get S&P inclusion, so we think it’s a lot of accounting, if you will, chicanery and we think reality is going to resurge in the back half of this year,” he stated.
The thesis of BEV disruption doesn’t match the numbers, with battery electrical autos making up simply 1.4% of the auto market in 2019 from 0.1% in 2011, in contrast with a 20-basis-poin rise in gentle vans, Johnson stated.
In the event that they made a revenue of their automotive enterprise, “we’d buy the stock,” Johnson added.
Many analysts cheered the corporate’s outcomes at present. Learn Extra: Analysts buzz over Tesla outcomes after one other worthwhile quarter