Tesla's Better Than Expected Q1 Dominates Aftermarket Trading

Tesla Is Tearing It Up In Evening Trading

Tesla (TSLA) waited until after the final bell rung in order to announce their earnings for Q1 of this year. When news broke that they did better than expected, the NASDAQ rallied and sent Tesla stock soaring by 2%. As of right now, Tesla is trading up 4.57 points at $235 per share. This is coming on the back of a trading day that saw a -2.52 point drop in share prices, ending regular trading at $230.43. It's also down from aftermarket highs of over $242.

New Products Drove Q1 Performance

A string of new products helped Tesla exceed performance estimates in the first quarter.
The company released plans for whole-house solar and a new model of the car. Investors are also excited about the Model X, which was announced in years past and expected to ship Q3 of 2015. There were rumblings about a new Model 3 coming this year as well. Tesla investors tend to be more patient than the market as a whole, and they have a real taste for the company's products.

Still Losing Money, Just Losing Less

The electric car company is still losing money, and producing less than 15,000 cars per year, but it is performing better than expected. Losses were lighter this quarter -- less than -$0.49 per share -- than projected, and the company is ramping up to sell and distribute the Model X's that have been pre-ordered.

In a lot of ways Tesla is still a fledgling car company. Even though consumers have quickly grown used to the brand, Tesla as a company hasn't yet become the mature, reliable car corporation that its investors want it to be. The business is still fighting through the awkward middle-ground, where it has big-company ideas and only a mid-sized capacity for execution.

High Volume Trading

Aftermarket volume was huge, with over 1 million shares exchanged, and the majority of them buy orders. To put those numbers in perspective, that would be heavy standard trading for Tesla, let alone aftermarket. As trading begins to calm down tonight, it looks likely that Tesla will post a strong opening tomorrow morning.

Stock Set To Open Big Tomorrow

Shares of Tesla could open as high as $239, but will likely open at a more realistic valuation of $234. That still a gain of 4 points over regular trading, and it comes on top of an evening where everyone on Wall Street was looking for a piece of the stock. Look for this trend to continue into tomorrow, but don't be surprised with an eventual Tesla slowdown over the sluggish summer. Until the car company can deliver on a few more of the models it has promised, it's still a risky pick.
Published on May 7, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2016. Content published with author's permission.

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