Bull of the Day: Tesla (TSLA) - Bull of the Day
April 02 2014 - 6:30AM
Zacks
There's been no company, or stock, as hot as
Tesla Motors,
Inc. (TSLA) over the last year. The luxury automaker is an
American success story, complete with a larger than life CEO in the
form of Elon Musk.
Tesla manufactures luxury highway capable electric
vehicles. It entered production of the Tesla Roadster in 2008, the
Model S in 2012 and will deliver the Model X this year.
The Future Looks Bright
Tesla is attempting to become the first new
successful U.S. automaker in over 50 years. It is off to a hot
start.
On Feb 19, Tesla reported fourth quarter results
and blew by the Zacks Consensus Estimate by 250%. It sold a record
6,892 Model S vehicles in the quarter. Gross margin was 25%.
Tesla was optimistic about 2014, especially
internationally. The Model S will start deliveries in China this
spring. If all things go according to plan, it expects Europe and
Asia combined sales to be twice that of North America by the end of
2014.
Full Year Estimates Soar
On Mar 28, federal safety regulators announced they
were closing their investigation into two fires in the Model S in
2013, deciding that the design of the car was not flawed.
Tesla, to assuage consumer fears, said it would
provide more protection to its lithium-ion batteries. No one was
hurt in the fire incidents.
Analysts like what they see. Estimates have been
moving sharply higher over the last 3 months. The 2014 Zacks
Consensus has jumped to $1.31 from $0.49 in the last 90 days.
That is earnings growth of 670%.
Analysts are bullish on 2015 as well. They see
continued earnings growth of 173%.
Tesla doesn't report monthly sales results as other
domestic automakers do. Investors have to wait until May, when
Tesla reports its first quarter results, to see how 2014 is shaping
up.
Shares Retreat From the Highs
Tesla has been a high momentum stock over the last
year. Shares are still up 38% year to date despite a drubbing in
the month of March as nervous investors sent them sinking 15%.
Even with the pullback, shares are no deal. Tesla
trades with a forward P/E of 162.
But you don't buy Tesla for the value. You buy it
for that triple digit earnings growth.
Tesla is also the only domestic U.S. automaker that
is a Zacks Rank #1 (Strong Buy).
If you're a growth investor, then Tesla should be
on your short list.
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Tracey Ryniec is the Value Stock Strategist for Zacks.com.
She is also the Editor of the Insider Trader and Value Investor
services. You can follow her on twitter at @TraceyRyniec.
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