Why Tesla Motors, Inc. Stock Was Slammed Today

What investors need to know about the decline in Tesla's stock price on Monday.

Daniel Sparks
Daniel Sparks
Feb 8, 2016 at 3:53PM
Industrials

What: Electric-car maker Tesla Motors' (NASDAQ:TSLA) stock fell as much as 10.2% today following bearish analyst chatter and ahead of the company's earnings release on Wednesday.

So what: Going into Tesla's fourth-quarter report, which is scheduled for this Wednesday after market close, investors are skittish -- possibly in anticipation of potentially worse-than-expected guidance as the electric car-maker appears to be struggling to ramp up production of its September-launched Model X SUV.

The day's sell-off follows several analyst downgrades last week for the stock. Morgan Stanley analyst Adam Jonas, who is bullish on the stock, downgraded his price target for Tesla shares from $450 to $333 on concerns about Tesla's expectations to follow through with the volume growth in vehicle deliveries he was expecting. Pacific Crest analysts said that orders for its new Model X are "lagging expectations" based on their "checks with U.S. sales centers."

Now what: There's no new information for investors that would make them adjust their thesis on the company. Neither analyst report is based on data directly from Tesla that can be confirmed. All investors can do at this point is wait until Wednesday to get an update from the management on Tesla's most recent quarter and on the company's expectations for the current quarter and the rest of the year.