Tesla Motors (TSLA) May Overtake Detroit Steel with Silicon Valley Smarts

Last week, shares of electric automaker Tesla Motors (TSLA: Charts, News) rallied over 10% despite missing estimates on both the top and bottom lines for its first quarter. Tesla Motors reported a loss of 76 cents per share, missing analysts' estimates by 7 cents. Tesla also reported a GAAP adjusted loss of 86 cents per share, a 69% plunge from the loss of 51 cents per share it posted in the prior year quarter.

Revenue came in at $30.2 million, missing the Street consensus of $31.9 million. On a GAAP adjusted basis, sales slid 38% from the prior year quarter. This is the first revenue decline that Tesla has posted in five consecutive quarters. Daily Chart
Shares have risen 17% since the beginning of the year, despite the speculative nature of the company. To date, Tesla Motors has yet to post a profit. The Palo Alto, California-based automaker, best known for its $100,000 all-electric Tesla Roadster, announced that deliveries of its Model S, a more mainstream sedan that retails for $57,400, are currently ahead of schedule and will arrive prior to its previously announced July shipping date. Despite the high price tag, the Model S is expected to attract upper middle class customers in the United States, who are likely to take advantage of a $7,500 tax credit for electric car purchases. The Model S boasts a range of 300 miles per charge, which exceeds all comparable vehicles from its industry peers. The Model S is expected to open up a new market for Tesla, and allow it to directly complete with similarly priced vehicles from Mercedes Benz, Audi and BMW. Tesla expects to ship 5,000 Model S sedans by the end of fiscal 2012. The company reported a backlog of 10,000 reservations for the vehicle. Tesla expressed confidence in the earlier introduction of the Model S, boosting its prior 2012 sales guidance from $550-600 million to $560-600 million. These two factors were enough to buoy the stock in a declining market. Tesla shipped 2,250 of its flagship Roadsters, with 250 remaining in Europe and Asia. The company reported 99 Roadsters delivered during the first quarter. Tesla also inked a deal with Daimler to create an all-electric powertrain for the new Mercedes-Benz EV, which complements its current contracts with Daimler as well as its joint venture with Toyota (TM: Charts, News), the RAV4 EV crossover SUV. To increase its visibility in Europe, Tesla signed an agreement with Athlon Car Lease to introduce the Model S to corporate customers across the continent. These deals have given Tesla clout in the auto industry, which initially dismissed the company as a doomed, speculative investment. Analysts believe the revenue from these agreements could make Tesla profitable as early as next year. Tesla intends to follow up the Model S with the Model X, an SUV slated to enter production in 2013. If the Model S is as successful as analysts expect it to be, then the Model X could solidify Tesla's reputation as a next generation automaker, built ground up for electric vehicles. Although Tesla's forward numbers look impressive, investors should still approach the company as a speculative investment. If countries begin to aggressively develop electric charging stations, then Tesla could have a bright future. However, if current global economic malaise continues, such plans could be postponed and Tesla's growth stifled. Other News About TSLA TeslaLossWidensasRoadsterEnds; ModelSDueinJune Tesla's Model S could be a game changer. TeslaMotorsbringsforwardModelSreleasedate Tesla stocks rallies despite steeper losses in the first quarter. Other Stocks in the News ActivisionBlizzardBeatsonBothTopandBottomLines Activision posts a surprising beat - will other video game retailers follow? GreenMountainCoffee: AGiddyWinforShort-Sellers Green Mountain gets swarmed by shorts. Copyright 2012 by InvestorGuide.com, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA InvestorGuide.com, Inc.) or its employees responsible.

Published on May 14, 2012
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

Copyrighted 2020. Content published with author's permission.

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