An analyst for JP Morgan is warning that Tesla's post-earnings rally is bunk and that a middling earnings report did not wash away Tesla's current raft of problems. 'We will make it up in volume!' is a pledge that Ryan Brinkman doesn't have a lot of faith in, and seems to suspect wasn't deeply thought out.
"Although both technology and execution risk seem substantially less than was once feared, expansion into higher volume segments with lower price points seems fraught with greater risk relative to demand, execution, and competition," Brinkman added. "Meanwhile, valuation appears to be pricing in upside related to expansion into mass-market segments well beyond our volume forecasts for the Model 3."
The bearish note on Tesla comes after the company reported a mixed — at best — fourth-quarter and full-year outlook last week.
…
During the earnings call with investors, Tesla CEO Elon Musk did his best to sound enthusiastic about Tesla's business. He also addressed demand concerns, stating: "Thus far in January we have seen the strongest orders year to date ever in our history." At the same time, however, he warned of a "severe" recession this year.
