Goldman Sachs: Tesla's third-quarter performance is mixed and leans negative

Goldman Sachs released a report stating that Tesla (TSLA.US) third-quarter performance was mixed and slightly negative compared to the bank's estimates and market consensus. The automotive gross margin, excluding regulatory credits, was 15.4%, slightly lower than the bank's estimate (15.7%) and market consensus (16.3%); while the non-GAAP earnings per share (excluding stock-based compensation) was $0.5, significantly lower than the bank's forecast of $0.62 and market consensus of $0.56 (higher operating expenses were the main obstacle, although part of it came from restructuring costs). However, total revenue, gross margin in the energy and services sector, and free cash flow all performed robustly and were above or in line with market consensus (although the bank's estimates for third-quarter revenue and free cash flow were slightly high).

Tesla's third-quarter revenue was $28.095 billion, up 25% quarter-on-quarter and up 12% year-on-year, which was 2% lower than Goldman Sachs' estimate of $28.545 billion but 6% higher than the market consensus estimate of $26.54 billion. Goldman Sachs rated Tesla as "Neutral" with a target price of $425