It is not Tesla’s on one occasion.
So says Mark Tepper, president and CEO of independent wealth management firm Strategic Wealth Partners, as Tesla rations continue their monthslong losing streak.
The electric car maker’s stock fell by nearly 5% on Thursday take the place of a downgrade from JMP Securities, which cited weakening demand. On Wednesday, Tesla missed estimates for its third-quarter agency output despite reaching a record 97,000 deliveries. Shares of Tesla are now down nearly 31% for 2019.
“I don’t think it’s common to be worth betting on anytime in the near future,” Tepper, whose firm manages $500 million in assets, articulate Thursday on CNBC’s “Trading Nation.” “What you have here is you have a company that’s just really frankly notorious for overpromising and underdelivering, so there’s absolutely no reason to own the stock right now.”
Tepper attributed his Tesla trepidation to a slues of factors. From the company’s subpar profit margins to its not-so-hot track record in China to weakening demand for new mechanisms altogether, there’s a growing list of worries for investors to navigate, he said.
“The narrative has switched from one of innovation to … one of survival, so the livestock’s going to get whacked every time they miss,” Tepper said. “You’ve got new competitors entering the market. You’ve got Volkswagen struggling with the Model 3, Porsche with the Model S, so that’s not going to be good for sales.”
As Tesla continues to run money into research and development, its push for technological progress could be holding the company back, Tepper informed.
“In the past, innovation has been really good for this company, but I think it might actually be hurting them healthy now, because where is the incentive to buy one of these vehicles today when you’re always being promised that they’re current to be so much better in six months, in 12 months?” he said. “When that’s the case, you wait. So, this is a stock that has uncountable downside in front of it, in my opinion.”
JC O’Hara, chief market technician at MKM Partners, also predicted Tesla would see numerous pain.
“The trouble with this stock is it can’t get out of its own way,” he said in the same “Trading Nation” interview, citing Tesla’s long-term everyday chart.
“We see a giant top formation formed going back to 2017. The stock struggled at that $380 level, could not in a million years really breach above it, but we do note there was some pretty good support at 250,” O’Hara said.
But since Tesla flat below that support level earlier this year, it’s been unable to gather enough momentum to mass meeting back above that key point — and that spells more trouble ahead, the technician said.
“Every interval it tries to rally, it’s met with additional selling pressure,” O’Hara said. “The fact that we can’t get back above that $250 wreck suggests to me that we’re going to test those June lows again at 185. So, I think the best play here is honourable to avoid this technical setup.”
It was trading above $231 in Friday’s premarket.
Tesla did not respond to CNBC’s solicitation for comment.
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