Tesla Motors (TSLA) Hits An All-Time High

Shares of electric automaker Tesla Motors (TSLA) surged last week to an all-time high last week, after the company reported second quarter earnings that easily topped analyst estimates. Tesla earned $0.20 per share, or $26.3 million, completely taking out analyst expectations for a loss of $0.19 per share, or $18.9 million. This was Tesla's second straight quarter of profitability, defying the bears who believed that they company could become profitable.

Tesla's revenue also surged from $26.7 million to $405.1 million, topping the average analyst estimate of $387.9 million. Daily Chart
After shares of Tesla hit an all-time high of $153, its market cap climbed to $18 billion, suggesting that a future filled with electric cars might not only be a possibility, but an inevitability. Tesla's Model S deliveries came in at 5,150 during the quarter, well ahead of the company's original forecast for 4,500. CEO Elon Musk stated that his target annual shipment rate of 40,000 units now looks "pretty safe." The company also noted that it improved its production rate "by 25% from 400 to almost 500 vehicles per week." Analysts, such as Deutsche Bank's Dan Galves, agreed. "We're very encouraged that they're saying the order rate for the Model S in North America has remained at 20,000 units," he stated. "That gives us a lot of confidence of Tesla reaching at least 40,000 globally, once the non-North American markets are opened up." Tesla's Model S is priced at $69,900 before a $7,500 tax credit. The vehicle received the highest rating ever from Consumer Reports. Musk stated that the vehicle is attracting customers who had previously owned a Toyota (TM) Prius and Daimler's Mercedes Benz E-Class. Looking ahead, the company's Model X SUV is set to go on sale late next year, and will priced close to the Model S. Musk also intends to produce a more affordable vehicle with a 200-mile range, with the target price of $35,000. Tesla started its leasing program in April, which reduced its net income by $19.3 million. The company's operating profit also excludes $16 million used for the early repayment of a U.S. Energy Department loan. $19.3 million in stock-based compensation was also excluded from operating income. Musk, who is also the CEO of SpaceX and the founder of SolarCity (SCTY), is focusing on building a viable network of charging stations nationwide by 2015, which provide a free charge for Tesla owners. Musk is also developing fast robotic battery-changing prototype stations that can switch out the battery for $50 for instant power. The company's operating margins came in at 22%, up from 17% in the first quarter. Tesla now anticipates top and bottom line growth, as well as higher cash flow for every quarter in 2013. Although Tesla is a tempting buy for growth investors at current prices, there is still lingering uncertainty that the stock's 420% rally over the past twelve months can continue. Other News About TSLA Tesla Shares Get A Charge Out Of Another Surprise Profit Tesla shocks analysts. Tesla Stock is Pedal to the Metal on Earnings News Tesla hits an all-time high. Other Stocks in the News Are These Three Recent Biotech IPOs Worth Buying? Should you buy these three new biotechs? A Smartphone-Induced Crash Diet Crushed This Company's Bottom Line What happened to Weight Watchers? Copyright 2013 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 Aug 15, 2013
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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