Record-Setting Deliveries Not Enough for Tesla Investors

After markets closed Wednesday, Tesla Inc. (NASDAQ: TSLA) reported that the company delivered approximately 97,000 vehicles in the third quarter, a record high. The company also said it produced 96,155 vehicles in the quarter, another record high.

Tesla’s performance did not live up to CEO Elon Musk’s “shot” at a target of 100,000 deliveries and the stock is being punished for missing a goal it never really set. Maybe one day Musk will catch on that words have meaning and will be a little more circumspect in what he says. Or maybe not.

The mix of deliveries and production tilted heavily toward the Model 3, Tesla’s least expensive model. The company built 79,837 of the vehicles in the quarter and delivered 79,600. Production of the Models S and X totaled 16,318 and deliveries totaled 17,400.

The company also reported that it received “record net orders in Q3 and [is] entering Q4 with an increase in [its] order backlog.” At the end of the second quarter, Tesla also increased its backlog but realized a decline in deposits paid as the company worked through its order backlog. That sequential decline in customer deposits diminished year-over-year cash flow by about $160 million.

Tesla has guided full-year deliveries of 360,000 to 400,000 vehicles. Including the third-quarter total, the company has delivered 255,370 vehicles, leaving a fourth-quarter target of 104,630 deliveries to meet the low-end of the company’s guidance. If Tesla can hit even 100,000 deliveries in the fourth quarter, the total would reflect a 45% year-over-year increase.

As Gene Munster and Will Thompson at Loup Ventures note, “[H]itting even the low end of 2019 guidance would be a big win for a company that struggles to properly set expectations.”

Tesla stock traded down about 5.7% early Thursday, at $229.21 in a 52-week range of $176.99 to $379.49. The consensus 12-month price target on the shares is $254.00.