Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold & the USDX: Correlations - 2nd Dec 20
How An Ancient Medicine Is Taking On The $16 Trillion Pharmaceutical Industry - 2nd Dec 20
Amazon Black Friday vs Prime Day vs Cyber Monday, Which are Real or Fake Sales - 1st Dec 20
The No.1 Biotech Stock for 2021 - 1st Dec 20
Stocks Bears Last Chance Before Market Rally To SPX 4200 In 2021 - 1st Dec 20
Globalists Poised for a “Great Reset” – Any Role for Gold? - 1st Dec 20
How to Get FREE REAL Christmas Tree 2020! Easy DIY Money Saving - 1st Dec 20
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20
MUST WATCH Before You Waste Money on Buying A New PC Computer System - 27th Nov 20
Gold: Insurance for Prudent Investors, Precious Metals Reduce Risk & Preserve Wealth - 27th Nov 20
How To Spot The End Of An Excess Market Trend Phase - 27th Nov 20
Snow Falling Effect Christmas Lights Outdoor Projector Amazon Review - 27th Nov 20
4 Reasons Why You Shouldn't Put off Your Roof Repairs - 27th Nov 20
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Tesla Motors - What's Next?

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

By: Money_Morning


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 :

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:

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

© 2005-2019 - 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

6 Critical Money Making Rules