Please ensure Javascript is enabled for purposes of website accessibility

Why Tesla Stock Fell on Friday

By Daniel Sparks - Jan 29, 2021 at 2:03PM

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

The electric car maker's shares are finally taking a meaningful breather after a massive run-up recently.

What happened

Shares of Tesla (TSLA -6.42%) tumbled on Friday. The stock fell as much as 6.6%. As of 1:30 p.m. EST, however, the stock was down 4.5%.

The growth stock's gain is likely primarily due to a bearish day for the overall market, with growth stocks getting hit particularly hard.

A chart showing a stock price falling

Image source: Getty Images.

So what

Highlighting the market's pullback on Friday, the S&P 500 was down about 1.9% as of this writing. Many growth stocks like Tesla, however, were down a few percentage points or more. Amid recent market volatility, some investors may be getting skittish, taking some profits on stocks that have seen outsize returns recently.

Tesla, of course, is a good candidate for profit-taking. After all, shares are up 600% over the past 12 months -- even including today's decline.

Now what

Though it's impossible to know where Tesla stock will trade in the near term, the underlying business has been demonstrating impressive execution recently.

Tesla recently reported strong fourth-quarter results. Though adjusted earnings per share for the quarter was worse than expected, revenue came in ahead of estimates as it soared 46% year over year. In addition, management guided for an acceleration in vehicle sales growth in 2021. Specifically, management believes vehicle deliveries this year will be more than 50% higher than in 2020.  

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.
TSLA
$663.90 (-6.42%) $-45.52

*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
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

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

Premium Investing Services

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