Tesla's latest quarter was "one of [the] top debacles" ever seen in 20 years of covering tech stocks on the US sharemarket, according to one Wall Street analyst.
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Wedbush analyst Daniel Ives said on Thursday the company's guidance was aggressive and management was not doing enough to cut costs, preserve capital and provide a sustained path to profitability.
"Musk & Co. in an episode out of the 'The Twilight Zone' act as if demand and profitability will magically return to the Tesla story," he said.
Ives downgraded the stock to the equivalent of a hold from buy, and slashed his 12-month share price target to $US275 from $US365.
The analyst is no stranger to tech debacles either, such as Apple's profit warning in January that shaved $US75 billion off the iPhone maker's market cap in a single day and prompted him to cut his price target on Apple by more than a quarter.
Tesla shares dropped as much as 3.4 per cent in New York on Thursday after the company reported a much wider-than-expected quarterly loss, reiterated its production outlook for the year and hinted at the possibility of a capital raising after Wall Street closed on Wednesday.
'Red flags'
"At this point the writing is on the wall that Tesla will likely have to raise over $US3 billion of capital in the near term to sustain its capex and debt needs given its current profitability path, which is another black cloud over the name with an inexperienced CFO now at the helm," Ives wrote in a note to clients.
"We continue to feel robotaxis, insurance products, and other endeavours are distractions from the growing demand woes that are not being addressed, which is a critical worry of ours at this juncture."
The rest of Wall Street wasn't exactly jubilant either, with RBC's Joseph Spak saying the results were "uglier than expected." The company now has 15 analysts advising their clients to dump the stock, compared to 12 with buy and 9 with hold ratings.
"Tesla has just lost $US700 million in a single quarter," wrote Evercore ISI analyst Arndt Ellinghorst, who has a sell rating on the stock.
"Cutting prices whilst claiming exceptional demand for all products raises obvious questions and red flags concerning underlying demand."
Bloomberg
