Investing in Tesla Motors, Inc. (NASDAQ: TSLA) is not for the faint of heart. After this stock began its fantastic upsurge from $37.86 per share on March 26, 2013, its share price always found support at its 200-day moving average until Dec. 4, 2014. When reaching a record, intraday high of $291.42 on Sept. 4, 2014, it took exactly three months for this stock to drop below its 200-day moving average for the first time since November 2012.
The Year 2014 Gets a Rough Start
Tesla’s stock performance was quite choppy through 2014, despite reaching its record high in September of that year. Tesla’s first-quarter earnings of 12 cents per share on revenue of $713 million beat analysts’ estimates of 10 cents per share on revenue of $699 million. However, investors focused on the bad news; the company reported a net quarterly operating loss of $49.8 million. As a result, Tesla’s share price sank 11.30% to $178.59, on May 8, 2014. Tesla’s second-quarter 2014 earnings beat sent the stock soaring 4.46% on Aug. 1, 2014, and it continued climbing toward its record high on Sept. 4, 2014. Another earnings beat for the third quarter of 2014 sent Tesla’s share price jumping 4.43% to $241.22, on Nov. 6, 2014.
Tesla’s Delivery Problems Begin
Although Tesla met its 2014 production target of 35,000 Model S cars, shipment of 1,400 cars was delayed until first quarter of 2015, due to customers on vacation, severe winter weather and shipping problems with actual ships. Tesla’s disappointing, fourth-quarter 2014 earnings and revenue sent its share price falling 4.66% to $202.88 on Feb. 12, 2015. Tesla’s stock price slid through the first quarter of 2015, reaching its lowest closing price for the year on March 27, 2015, when it ended the day at $185. Tesla’s first-quarter 2015 earnings of negative 36 cents per share on revenue of $1.10 billion beat analysts’ estimates of negative 50 cents per share on revenue of $1.04 billion. On May 7, 2015, Tesla’s share price surged 2.76% to $236.80.
Vehicle Deliveries Overshadow Earnings
Tesla’s second-quarter 2015 earnings report disclosed that the company delivered only 11,532 vehicles during the second quarter and expected to deliver “approximately the same number” during the third quarter of 2015. Tesla’s lowering of its 2015 vehicle delivery target from 55,000 to a range of 50,000 to 55,000 obviously upset investors. Despite better-than-expected earnings and revenue, Tesla’s share price sank 8.88% to $246.13 on Aug. 6, 2015.
Tesla’s third-quarter 2015 earnings report indicated earnings of negative 58 cents per share on revenue of $1.24 billion, missing analysts’ estimates of negative 50 cents per share on revenue of $1.26 billion. Although weak delivery numbers had pushed the share price lower during the previous quarter, despite an earnings beat, those priorities caused a rally after the third-quarter earnings report. The third quarter’s better-than-expected vehicle production and delivery numbers outweighed earnings and revenue disappointments. Tesla’s share price vaulted 11.17% to $231.63 on Nov. 4, 2015.
On Feb. 10, 2016, Tesla shares reached their lowest closing price in two years. After the closing bell, Tesla’s fourth-quarter earnings of negative 87 cents per share on revenue of $1.75 billion fell far short of analysts’ estimated earnings of 10 cents per share on revenue of $1.81 billion. However, the company’s delivery of 17,478 vehicles during the quarter, combined with its announcement of the planned delivery of 80,000 to 90,000 vehicles during 2016, sparked a surge of bullishness. Tesla’s share price jumped 4.73% to $150.47 on Feb. 11, 2016. The ensuing rally sent the stock on a sustained advance. By April 6, 2016, Tesla’s share price had skyrocketed 84.74% since the release of the company’s fourth-quarter 2015 earnings report.
Opinions From Analysts
As of April 8, 2016, Tesla had a broad spectrum of analyst ratings, from the bearish outlook of Ronnie Moas at Standpoint Research, Inc. to the rose-colored-glasses bullishness of Morgan Stanley’s (NYSE: MS) Adam Jonas. Before the release of Tesla’s fourth-quarter 2015 earnings report, Adam Jonas lowered his Tesla price target from $450 to $333 per share, while maintaining his buy rating on the stock. The April 8, 2016, downgrade of Tesla from hold to sell by Ronnie Moas of Standpoint Research sent the automaker’s share price falling 2.77% to $250.07. The analyst’s parting shot that it would take Tesla five to 10 years before reaching its April 17, 2016, valuation served as a grim reminder of this stock’s stratospheric, forward price-to-earnings (P/E) ratio of 98.7. NASDAQ reports five negative analyst ratings for Tesla, with four strong buy recommendations, two buy ratings, four hold recommendations, two underperform ratings and three sell recommendations.