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Why Tesla Is Poised to Pull Back

By Brian D. Pacampara, CFA - Apr 23, 2013 at 8:00PM

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Market-lagging returns could be written in this 2-Star.

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 (TSLA 1.66%) 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.

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Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$674.90 (1.66%) $11.00
Toyota Motor Corporation Stock Quote
Toyota Motor Corporation
TM
$161.35 (1.70%) $2.69
General Motors Company Stock Quote
General Motors Company
GM
$36.00 (1.70%) $0.60

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

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