GLJ Research Reiterates Sell on Tesla, $24.86 Price Target

GLJ Research analyst Gordon Johnson reiterated a Sell rating and $24.86 price target on Tesla (NASDAQ: TSLA).

“We’ve learned to keep a simple rule for Tesla product launches: count what can be counted.

Last night we could count one thing, and that was 45 Cybercab registrations with the Texas DMV as of Wednesday. Tesla did not offer a second number.

There was: (a) no deployment target, (b) no pricing, (c) no consumer order button, (d) no livestream, and (e) no CEO on stage.

Attendees, a curated group of Tesla-friendly creators/cultists with instructions that plus-ones could not themselves be creators, took rides in a two-seater with no steering wheel and no pedals.

Then they posted about it. That was the event.

To be fair about what did happen: a purpose-built, production vehicle with no manual controls is now carrying members of the public for money inside a (tiny) geofence in a city (i.e., Austin).

Twenty-three months ago, in Burbank, the same car was a prop on a soundstage. The gap between those two facts is real engineering and we do not wave it away. But the stock is not priced for a car.

It is priced for a network, and on the network the company told us nothing it had not already said.

The market’s disappointment (link) here, we believe, is not that Tesla failed some test of our devising.

It is that Tesla’s most sympathetic sell-side coverage laid out, in writing and in advance, exactly what a good outcome looked like, and the company came in under the low end of it.

Morgan Stanley (Equal-weight, $400) wrote on September 2nd that five-to-ten Cybercabs on the road would read as “a handful” and that 25 to 50 across Texas would likely push the shares higher.

The bull case, according to Morgan stanley’s September 2nd note, was paid, unsupervised Cybercab rides across Austin, Houston and Dallas.

What we got was one city, an undisclosed subset of 45 registered cars, and an app that as of Thursday night would not let you ask for one. Conclusion? Sell-the-news.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.