Tesla stock slips after Q3 2020 deliveries report

Tesla stock is slipping after the company announced its Q3 2020 deliveries. The automaker beat consensus estimates for its Q3 2020 deliveries, but given that Tesla stock was priced for perfection, it isn’t a big surprise that the beat wasn’t good enough to boost the shares.

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Q2 2020 hedge fund letters, conferences and more

Tesla stock falls after Q3 2020 deliveries

The company reported 139,300 deliveries for the third quarter, including 124,000 Model 3 cars and Model Y crossovers. Consensus estimates stood at 136,000 and 122,000, respectively. Canaccord Genuity analyst Jed Dorsheimer said in a report following the release that he expected the numbers to disappoint.

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He pointed to the leaked email CEO Elon Musk sent to employees, which indicated that the automaker was on track for a new record on deliveries, and higher Street expectations as the reasons for the disappointment. He also noted that Tesla lost a full day due to a server outage a few weeks ago.

The Q3 2020 deliveries report all but confirms that Tesla will miss its full-year guidance for deliveries, which could be another reason the stock is slipping today. The automaker originally guided for 500,000 deliveries this year.

Q3 deliveries mean missed guidance

In order for Tesla to meet its guidance, it would have to deliver 181,000 vehicles during the fourth quarter, which is well above its current record of 139,000 deliveries from Q3 2020. Wall Street expects the automaker to deliver 480,000 vehicles in all of 2020, so to meet that number, it will have to deliver 161,000 vehicles.

Dorsheimer believes delivery estimates for the full year will come down since it looks like Tesla might not even be able to meet the Street estimate of 480,000 for 2020. That could also mean that earnings, profit and other estimates will be cut as well. He expects to learn much more on the third-quarter earnings call.

Bloomberg Intelligence analyst Kevin Tynan said that during the fourth quarter, if Tesla can deliver a "similar" number of deliveries to the third quarter, the Street will give it a pass for missing its full-year target. He noted that the automaker produced a record 145,000 vehicles during the third quarter, which is another reason to expect a miss for the full year.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver