Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Tesla Motors - What's Next?

Companies / US Auto's Nov 11, 2013 - 03:51 PM GMT

By: Money_Morning

Companies

Kyle Anderson writes: Tesla Motors Inc. (Nasdaq: TSLA) has seen a meteoric rise of 410% since the start of 2013, and the electric automaker is set to announce its third-quarter earnings tomorrow (Tuesday) after market close. TSLA climbed 8% today to $175.18 ahead of the report.

Analysts predict earnings of $0.11 per share for the electric automobile manufacturer. The California-based company suffered an earnings loss of $0.92 per share in the third quarter of 2012.


Analysts are optimistic that Tesla will report a quarterly revenue of more than $534 million, good for an incredible 967% year-over-year increase.

But those aren't the most important numbers investors should watch. The number that could be most impressive when chief executive officer and co-founder Elon Musk makes his announcement Tuesday is Tesla's profit margin.

In a recent conference call, Musk projected a profit margin of 19%. That's up from TSLA's second-quarter figure of 13% and is a significant increase from the first quarter, when Tesla reported a profit margin of just 5%.

Traditionally, automakers report slim profit margins, making TSLA's 19% projections all the more impressive. In their last earnings reports, General Motors Co. (NYSE: GM), Honda Motor Co. Ltd. (NYSE: HMC), Toyota Motor Corp. (NYSE: TM), and Ford Motor Co. (NYSE: F) posted profit margins of 3.6%, 3.5%, 5.4%, and 3.9% respectively.

Musk's profit-margin optimism continues to the fourth quarter, where he is targeting 25%.

Some more good news that investors hope will boost Tesla stock after earnings:

An expanded agreement with battery-producer Panasonic Corp. is expected to increase production of Tesla models and therefore positively impact sales.

The automaker also recently unveiled its "Supercharger Corridor" that allows owners of the Model S to travel from San Diego to Vancouver without having to pay a dime. Charging stations have been set up throughout California, Oregon, and Washington for owners of the electric vehicle.

While these developments, paired with the growth figures, are encouraging for shareholders, not all of Tesla's figures are quite as rosy...

In its last earnings report, TSLA reported a return on assets of -10.2% and an operating margin of -16.4%. So while all signs point to a positive earnings report for the electric vehicle maker, laying money on a company previously operating in the negative is unsettling for many potential investors.

And then, of course, there's the news about the two Tesla car fires in the past two months, which has left some investors wary.

Investing in Tesla (Nasdaq: TSLA) Stock Moving Forward

TSLA is up more than 400% since January, but more recently has pulled back. TSLA has dipped roughly 5% in the past 30 days. TSLA opened Monday at $165.00.

It also suffered its biggest one-month loss of market value in October, losing $4.1 billion in value as the share price fell 17%.

If TSLA exceeds its earnings estimates and posts a profit margin of more than 19%, the stock should see a bump in the immediate aftermath.

However, for buy-and-hold investors, TSLA is a risk not worth taking. Trading at an all-time high as recently as September, it's unlikely TSLA will maintain momentum.

The fact that TSLA doesn't offer shareholders a dividend is another strike against the stock.

And if TSLA does not match earnings estimates, the stock could experience a major drop.

The big money seems to be betting on TSLA's run coming to an end...

According to Bank of America Merrill Lynch, big money managers and hedge funds have reduced their TSLA holdings in recent months. Institutional investor ownership in Tesla stock fell to 66% in September from 84% in January, according to CNNMoney.

If you needed more evidence for avoiding TSLA, Musk himself recently pointed out that the stock is overvalued.

"The stock price that we have is more than we have any right to deserve," Musk said at a showroom opening in London this October.

If you were in on Tesla at the start of 2013, congratulations. If you missed the boat, don't bother jumping in now.

This earnings season hasn't impressed anyone - but the stock market keeps climbing. Here's why that disconnect will continue to widen...

Source :http://moneymorning.com/2013/11/04/tesla-motors-n...

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in