Why Tesla Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, electric vehicle operator Tesla Motors (NASDAQ: TSLA  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Tesla and see what CAPS investors are saying about the stock right now.

Tesla facts

Headquarters

Palo Alto, Calif. (2003)

Market Cap

$5.8 billion

Industry

Automobile manufacturers

Trailing-12-Month Revenue

$413.3 million

Management

Co-Founder/Chairman/CEO Elon Musk

CFO Deepak Ahuja

Return on Equity (average, past 3 years)

(45.9%)

Cash/Debt

$201.9 million / $466.7 million

Competitors

General Motors

Pininfarina

Toyota Motor

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 34% of the 1,269 members who have rated Tesla believe the stock will underperform the S&P 500 going forward.

Just last week, one of those bears, FreePoetInvestor, tapped the stock's recent surge as seemingly unsustainable:

Tesla stock has made impressive gains over the past month -- it has demonstrated that it can make a profit, and it's offered a new financial scheme for buys, to lease the Model S for those that might not have the means to afford the steep price-tag. That said, the recent performance also feels fueled by some hype. Tesla still has a long ways to go before becoming the going concern it needs to be. ... Over the long term, there may be potential, but this recent uptick feels a bit overdone.

Near-faultless execution has led Tesla Motors to the brink of success, but the road ahead remains a hard one. Despite progress, a looming question remains: Will Tesla be able to fend off its big-name competitors? The Motley Fool answers this question and more in our most in-depth Tesla research available for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now.


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Comments from our Foolish Readers

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  • Report this Comment On April 23, 2013, at 8:31 PM, speechisntfree wrote:

    you have got to be kidding me..... this is what qualifies as credible journalism?.....

    and one idiot of 180 thousand other idiots gets quoted and that becomes the factual source?.....

    how about we tell it like it is..... all of you short sellers are about to be left out in the wind with a 40% float mostly with no hedge..... so now you'll start your manipulative campaign.....

    too bad..... you're toast..... not to mention..... Tesla is a good company.

  • Report this Comment On April 23, 2013, at 9:56 PM, autoinsider wrote:

    After the first adopters, superstars and Hollywood wannabees, what do you have? The electric car market is so thin, even the big guys can't make a buck with it.

  • Report this Comment On April 23, 2013, at 11:21 PM, mumbonig wrote:

    Autoinsider that wont happen for awhile maybe a couple years. Tesla is selling and they will be selling cars for a profit for years to come. By then infrastructure and lower priced cars will be in placed to be available to the general population. Tesla is playing this perfectly they are selling high end cars to people who can afford a second car and by then infrastructure will be in placed and demand for electric cars will go up. Tesla has earned themselves a spot in the car industry and i don't see any reason for them to disappear especially sense technology could heavily aid them with better batteries and a recharge time of less then 10 minutes.

  • Report this Comment On April 24, 2013, at 1:45 AM, stainlesssteel77 wrote:

    Here is Brian Pacampara's entire case why "Tesla is Poised to Pull Back"--a random quote from "one of those bears," FreePoetInvestor:

    "Tesla stock has made impressive gains over the past month...feels fueled by some hype. Tesla still has a long ways to go before becoming the going concern it needs to be...this recent uptick feels a bit overdone"

    Thanks for wasting our time with your content-free analysis.

  • Report this Comment On April 24, 2013, at 10:22 AM, Stymie67 wrote:

    So FreePoetInvestor said that "just last week"?! Ewwwwwww....forbidding indeed! LOL

    PS this offers absolutely zero evidence, analysis, or even a whiff if a scent of a case, as to how/why Telsa will lag the market. Seems they are heading the other direction, no? The article reads more like an op-ed

  • Report this Comment On April 24, 2013, at 10:24 AM, Connelky wrote:

    I agree, tesla is going to pull back some, people are just getting too excited now. In addition, the model s will only continue having strong sales for maybe 2 or 3 more years. I am sure tesla knows this. In that time tesla should have gen iii ready, which is a completely different conversation.

    The model s does not need to be a big seller for long, just long enough to accomplish all the things tesla needs it for. Also in the pipeline is some very exciting battery technology. It's funny, people talk about how difficult li-ion is and criticize tesla for it. Tesla has made it work, and as soon as the next battery is ready it can be quickly designed into future tesla cars.

  • Report this Comment On April 24, 2013, at 1:57 PM, ffbj wrote:

    Gosh a stock that has been on fire is due for a pullback? How strange, how odd, how now brown cow?

    As far as the 2 stars goes, everyone knows the fool is mostly made up of guys who still use rotary phones. Anything newfangled or whipper-snapperish (Midas Musk) is considered bad. Want evidence, look at Tsla up over 100% from ipo up 85% since October, and up 35% in the last month. Lnkd, another hated stock here at the fool, basically a triple since the ipo. In other words when it comes to new stuff the fools patrons are not too reliable.

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