Stock (Symbol) |
Tesla (TSLA) |
Stock Price |
$214 |
Sector |
| Technology |
Data is as of |
| October 3, 2016 |
Expected to Report |
| Nov 1 – 7 |
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) is revolutionizing the automobile industry. If you haven’t driven a Tesla yet, it’s far and away so much more fun than a regular car that the only things I can compare it to are a rocketship or a theme park ride. The acceleration takes you right off your seat. Turning is nimble as there’s not a load of gas swishing in the rear. There’s even a trunk in the front as well as the back. Naysayers remain worried about long-trips, but the Tesla GPS maps out where to stop in advance and makes it so you can take a 15-20 minute break every 4 hours. And every new Tesla comes with unlimited free access to the Supercharger network. Tesla’s CEO Elon Musk had a goal to grow sales from 50,000 cars in 2015 to 500,000 in 2020 — and last qtr he cut that time to 2018. This year TSLA has delivered 15,000 cars in Q1, 18,000 in Q2 and 25,000 last qtr. The company expects to deliver around 25,000 in Q4 and that would mean a total of 83,000, which would be a 66% gain over last year. The new Tesla 3 is expected to be in production (perhaps shipping) a year from now, and the next venture will be the Tesla Y compact SUV followed by a minibus for public transportation (I’m assuming driverless). At $35,000 the Tesla 3 is going to revolutionize cars like the iPhone did to cell phones. With a ten-fold gain in sales expected within 3-to-5 years, what will that do for the stock price? TSLA is expected to lose $1 this year and make close to $10 in 2019. I consider it a must-own growth stock, but for now the stock is in a range between $200 and $225 as investors don’t want a merger with SolarCity. |
One Year Chart |
 Last qtr TSLA was supposed to make a profit. But estimates got lowered twice, then the company missed the mark by a long shot and actually lost money. So for now we just have to accept the losses, and think long-term. Unfortunately that doesn’t quite fit-the-mold and thus this stock is stuck in a range. Also, Musk wants to merge with solar panel company SolarCity, but investors don’t like the idea and think TSLA should focus on cars. I personally like the merger as it would tie in the car with charging, but I don’t like solar panels in general as investments. Estimates are for 110%, 163%, 160% and 108% profit growth the next 4 qtrs but TSLA just had profit estimates slashed so now I expect the losses to continue. |
Fair Value |
 It’s tough to put a near term price target on this stock. We would have to look further out when profits are set to really materialize. 2018’s estimate is currently $5.62 and a 75 P/E would be $422. But this profit figure is just a guess at this point. $10 in profits and a 75 multiple would be a $750 stock but that’s pie-in-the-sky. |
Bottom Line |
 Tesla is one of the greatest companies of our generation, and the stock fits the mold of past stock market winners in every way other than profits. The company has to build factories and battery manufacturing plants. In this stock’s history it has based for years, then shot higher, and is now in another multi-year base. My guess is the stock could break out next year when the Tesla 3 is expected be in production. For now investors have time to accumulate a position. TSLA ranks 12th in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
12 of 37Aggressive Growth Portfolio 12 of 17Conservative Stock Portfolio N/A |
