Tesla Motors Inc(NASDAQ:TSLA) Bulls Are Ecstatic [Apple Inc.]

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February 24, 2014 11:36am NASDAQ:QCLN

teslaMichelle Cook: Tesla Motors Inc(NASDAQ:TSLA) hit record highs this week after an earnings report beat estimates and the company issued very positive guidance on car production and sales. After the earnings report on Wednesday, TSLA soared in


after-hours trading, at one point going up as high as 16%. The stock fell a bit on Thursday, but at the end of the day, it was 8.43% higher than it had been 24 hours before.

TSLA beats market again

Overall, for the past week — from close of trading Friday, Feb. 14 to Feb. 21, TSLA rose 5.74%, ending the week at 209.60.

Once again, TSLA easily beat the market. For comparison, NASDAQ rose 0.46% for the same period, the Dow fell 0.32%, and the S&P 500 fell 0.13%.

Welcome news in the earnings report

What impressed investors was Tesla beating fourth-quarter earnings estimates, providing very positive guidance, and stating that it expects demand for the Model S in China to be so strong this year that it will outstrip supply.

Tesla said it expects weekly production of its Model S to increase from 600 cars per week to 1,000 per week by the end of the year. It expects to deliver 35,000 cars in 2014, a robust 55% higher than in 2013.

Adjusted fourth-quarter earnings were $0.33 per share, easily beating the estimate of $0.25. Revenues were $761 million, higher than the expected $713.50 million.

The Gigafactory

Musk said its planned Gigafactory will enable Tesla to achieve a “major reduction” in battery price. He promised more news about the Gigafactory soon.

The Apple rumors

Tesla CEO Elon Musk confirmed the widely-circulated rumors that he had met last year with the Apple Inc.(NASDAQ:AAPL) executive in charge of mergers and acquisitions. He said he couldn’t comment on whether the talk was about any kind of acquisition, but he did say it was “very unlikely” that Tesla would be for sale.

Perhaps one possibility is that Apple could be interested in becoming a partner in the Gigafactory

Deutsche Bank downgrade

In one of the few pieces of negative news about Tesla this week, Deutsche Bank downgraded TSLA from a buy to a hold because of concerns about valuation — though it also raised its price estimate from $200 to $220.

First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)

TSLA bulls point to the blow-out earnings report and guidance as indications that the best is yet to come for TSLA investors. There are risks, however. Bears think the stock price has gotten ahead of itself and is ripe for a pullback, that Tesla could encounter unforeseen problems, and that competitors could pose a serious threat.

If you would like to invest in TSLA while minimizing the risk of investing in an individual stock, consider the First Trust NASDAQ Clean Edge US (ETF)(NASDAQ:QCLN). TSLA is the fund’s largest stock, comprising 11.57% of the fund’s holdings. Overall, the fund currently invests in 42 companies, spreading investors’ risk among companies involved in different aspects of the clean-energy industry..

By Michelle Cook, ETF Daily News


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