Stock (Symbol) |
Tesla (TSLA) |
Stock Price |
$191 |
Sector |
| Technology |
Data is as of |
| January 31, 2016 |
Expected to Report |
| Feb 10 |
Company Description |
 Tesla Motors, Inc. is a United States-based company, which designs, develops, manufactures and sells electric vehicles, electric vehicle powertrain components and stationary energy storage systems. TSLA sells and produces a vehicle under the name Model S, which is a fully electric, four-door, five-adult passenger sedan. In addition to developing its own vehicles, it develops, sells, and services full electric powertrain systems and components to other automobile manufacturers. It also produces and sells stationary energy storage products for use in homes, commercial sites and utilities. It sells its vehicles through its own sales and service network. The Company also offers the Model X electric car, Supercharger charging stations and Powerwall, a home battery. Source: Thomson Financial |
Sharek’s Take |
 Tesla (TSLA) broke long-term support levels today, sinking to a 52-week low as NASDAQ darlings are taking it on the chin today. Although the news — and now the chart — isn’t good, this is a juggernaut that will someday change the world. Last qtr TSLA sold 17,000 Model S sedans (up 64% year over year) and 208 of its recently launched Model X SUVs. The next catalyst will be a Tesla 3, which is expected to be revealed next month with deliveries expected in 2017. At $37,500 the 3 will revolutionize driving as it makes Teslas affordable to the masses. Billionaire mutual fund manager Ron Baron has TSLA as one of his top stocks and predicts the company will continue to grow output 50% a year. He thinks in 25 years we could all be driving Teslas and expects to make 4-5 times his money on TSLA in 4-5 years, potentially 4-5x more the following 5-6 years. Although oil is low now, the movement to electric and autonomous cars has already begun. No one is close to doing one as good as Tesla. I have TSLA on my radar for growth accounts, and will pay close attention when the company reports earnings next week. |
One Year Chart |
 Here’s the one-year chart of TSLA. The company lost money in each of the last 4 qtrs, but is expected to make a profit in each of the next 4. I feel this profit growth, along with Model 3 hype, could push the stock to new highs. Nice Est LTG of 101%, and the 109 P/E isn’t that bad considering this is a small company with big potential. |
Fair Value |
 My Fair Value on this stock is 75x earnings, which would equate to a $310 stock next year. Notice how the company is expected to report a loss for 2015, then have profits surge higher in 2016 and 2017. Still, I don’t have faith in these numbers as the company could continue to spend to grow and might not hit the $4.13 estimate next year. This is a long-term story, where the eventual expectation is $10 a share in profits in an unknown timeline. |
Bottom Line |
 The last time Tesla broke out and bolted higher was in 2013. I remember not buying as it broke out, and have regretted it since. What caused the breakout was a quarterly profit. TSLA is set to have a profit next qtr as well, and that in addition to the Model 3 could be a catalyst for this stock. I feel Tesla is a must-own growth stock, but we are in a rough stock market where high P/E stocks are getting creamed. I have TSLA at the top of my radar, and may buy in as early as next week. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
