Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Tesla Stock Jumped Monday

By Daniel Sparks - Sep 10, 2018 at 12:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Tesla CEO Elon Musk teases a record quarter, and one analyst calls Tesla stock a "Fresh Pick." Here's what you should know.

What happened

Shares of electric-car company Tesla ( TSLA -6.42% ) moved higher Monday, rising as much as 6%. At 11:28 EDT, shares were up 5%. The stock's gain follows a letter from Tesla CEO Elon Musk to employees over the weekend that said the company was ready to report its best quarter ever.

Also, one analyst notably reiterated an outperform rating on Tesla stock on Monday.

A woman unlocks her Model 3 with a Tesla app on her smartphone

Model 3. Image source: Tesla.

So what

Musk told employees on Friday afternoon that its third quarter, which comes to a close at the end of September, will be "the most amazing quarter in our history," featuring double the vehicle production and deliveries Tesla achieved in Q2. The growth, Musk said, represents "the most mind-blowing growth in the history of the automotive industry."

Tesla also made headlines on Monday after Baird analyst Ben Kallo called Tesla a "Fresh Pick" (via CNBC). "[W]e believe strong fundamentals should drive shares higher," Kallo said. More specifically, the analyst said he sees Tesla's Gigafactory and its manufacturing as competitive advantages that will help keep competitors at bay as the company drives down costs with economies of scale.

Now what

Tesla predicted it would report a profit and be cash flow positive in both Q3 and Q4. To do this, however, management has said the company would need to achieve -- and sustain -- a production rate for Model 3 of 5,000 units per week.

Tesla will report its quarterly vehicle deliveries early next month.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
$1,014.97 (-6.42%) $-69.63

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.