Why Tesla Motors Inc Stock Was Moving in Reverse Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Tesla Motors Inc  (NASDAQ: TSLA  ) were stalling out today, falling as much as 10% after reporting first-quarter earnings last night.

So what: It was by no means a bad quarter for the electric vehicle maker as it beat estimates on both top and bottom lines. Tesla posted an adjusted per-share profit of $0.12 against expectations of $0.10, and non-GAAP revenue grew 27% to $713 million, ahead of the consensus at $683.5 million. Vehicles deliveries in the quarter at 6,457 were in line with guidance at 6,400, and the company maintained its full-year delivery guidance of 35,000 cars. 

Now what: Tesla seemed to be a victim of its own success with today's report as the company only beat analyst estimates modestly as expectations may have run out of control. It also said free cash flow would run negative this year as it begins construction of its lithium-ion plant known as the "gigafactory." Wall Street has a tendency to punish companies for sacrificing short-term earnings for what seems like sound long-term planning, so I'd tend to overlook today's drop on that account. Still, Tesla shares remain dearly priced, and investors should be aware that one quarter of scaled-back results could cause the stock to plummet again. 

Looking for the next Tesla?
Give me five minutes, and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year, his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252%, and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 08, 2014, at 7:38 PM, BentMike wrote:

    "Tesla seemed to be a victim of its own success with today's report as the company only beat analyst estimates modestly as expectations may have run out of control. "

    Of course Tesla is not a victim at all, Musk has been saying for a long while that people were paying too much for the shares. Now the shareholders who paid no attention are victims of there own emotions.

    These kind of statements are essentially advertising for the writer/publisher and they only serve to torque people up unnecessarily.

    Certainly nothing has really changed about Tesla's success, or performance - they are continuing to amaze. Just not $200 a share worth of amaze.

  • Report this Comment On May 12, 2014, at 5:03 AM, EvaBrain wrote:

    It looks there are some high visibility Chinese Tesla owners but the fact that Brad Pitt and Angelina Jolie drive a Model S can help sell even more of the cars in China.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2949700, ~/Articles/ArticleHandler.aspx, 10/24/2014 11:08:04 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement