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. 

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  • 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.

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Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

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