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Something’s Wrong with Tesla Stock

Stock (Symbol)

Tesla (TSLA)

Stock Price

$283

Sector
Energy & Commodities
Data is as of
April 24, 2018
Expected to Report
May 2
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 the Model S and Model X electric cars, Supercharger charging stations and Powerwall, a home battery. Source: Thomson Financial
Sharek’s Take
David SharekSomething is wrong with Tesla (TSLA) stock. The stock seems to be sliding down a mountain when I look at the one-year chart. And when I updated my spreadsheet yesterday, I see profit estimates just got slashed for the 2nd straight qtr. Now TSLA doesn’t have to make profits for the stock to go up — investors can envision profits down the road — but when the chart looks like this (below) and estimates are declining, it’s a good sign you need to reduce your exposure, which means selling some shares. Still, I am holding some as here’s the delivery figures the past 6 years:

  • 3000 vehicles in 2012
  • 22,000 in 2013
  • 35,000 in 2014
  • 50,000 cars in 2015
  • 84,000 in 2016
  • 101,000 in 2017

Here’s Tesla’s current lineup with number of cars delivered last qtr:

  • 15,200 Model S. The S which went from prototype to production in 2012 and within three years owned one-qtr of the U.S. Large Luxury Vehicle market.
  • 13,120 Model X. In 2015 Tesla introduced the ridiculously fast an all-wheel drive SUV with falcon wing doors, seating for 7, and is ridiculously fast.
  • 1,550 Model 3 is Tesla’s entry into the mainstream market, with a price tag starting at $35,000 but lower profit margins.

Tesla delivered around 2000 cars per week last year and plans to be at 5000 cars a week by the end of 2018 Q2. From the look of the one-year chart I don’t think that’s gonna happen. Plus, 2018 profit estimates have slid from -$0.78 to -$3.73 and -$6.90 the past three qtrs. I had TSLA as my top holding at one point in 2017, and have sold off a lot of my position. The stock is a small position in my Growth Portfolio. I’m bearish short-term and bullish long-term.

One Year Chart
This stock was supposed to be making profits by now. But nope. None in the last 4 qtrs and nothing on the horizon for the next 4 qtrs. Analysts don’t even have an Estimates Long-Term Growth Rate on the stock. There’s no P/E because te company is losing money. TSLA had a big gap down to $250, then recovered, and has been back to sliding down.
Fair Value
I don’t have a Fair Value on this stock for 2018. If we give it a 125 P/E for 2019 then we get a $231 Fair Value.  But that figure was $4.48 last qtr so we can’t bank on proftis in 2019. This table is incomplete, please don’t take that $231 Fair Value for next year seriously.
Bottom Line
Tesla is one of the greatest investment opportunities of our lifetime, but carries risk. I do like that the stock has soared higher, then based, then soared higher, then based. Let’s see if the company can get up to 5000 cars a week. I’m still bullish on the company long-term and will continue to hold it Growth Portfolio where the stock will rank 39th of 40 stocks in the Power Rankings.
Power Rankings
Growth Stock Portfolio

39 of 40

Aggressive Growth Portfolio

N/A

Conservative Stock Portfolio

N/A

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