Shares of Tesla (NASDAQ: TSLA) soared 3.4% Monday after the company reported it delivered 499,500 cars to its customers in 2020. Wall Street analysts believe that investors will now place their focus on margins.
Fundamental analysis: Strong demand recorded in December
Tesla, the world largest producer of electric cars, said it delivered 180,570 units in the fourth quarter. For 2020, Tesla managed to deliver 499,500 cars to its customers. This is slightly lower than a target of 500,000 set by its founder and CEO Elon Musk.
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“Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct. Final numbers could vary by up to 0.5% or more,” the company said in the statement.
Tesla officially became a part of the S&P 500 index last month. Cowen analyst Jeffrey Osborne believes that the latest delivery numbers shift the focus from output to margins.
“We don’t see the 4Q20 results moving the bulls or the bears and expect a fierce debate on the stock to continue. All eyes will be on margins given 180,570 deliveries vs. 210,000 capacity and price cuts during the quarter, regulatory credits and commentary on full self-driving (FSD) when Tesla reports results in the coming weeks,” said Osborne in a note.
He adds that Cowen is taking a long-term outlook on Tesla stock.
“Our $380 price target is based off of a ~35x EBITDA multiple on our 2025 EBITDA estimate of $12.2bn. Given Tesla’s steady margin performance and industry leadership in both EV market share as well as electrical efficiency, leveraging in-house produced motors, SiC based inverters, and an innovative HVAC compressor system, we believe a “tech like” multiple is warranted,” he concludes.
Technical analysis: Bull run continues
Tesla share price gained 3.4% yesterday to start the New Year higher. This way, Tesla investors have ignored the overall bearish sentiment in US equities present on Monday and push the price action to fresh all-time highs.
Tesla stock weekly chart (TradingView)
Tesla stock price is now likely to head towards $785.00, where the 261.8% Fibonacci extension line is located. On the downside, the previous all-time high of $695.00 will now act as support in the near-term.
Tesla stock price rose a further 3.5% this week after the company reported another impressive set of delivery numbers for December.