This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Tesla Soars as Model S Exceeds Targets (Update 2)

Stocks in this article: TSLA

Updated from 10:03 a.m. EDT to provide analyst comments regarding profitability in the seventh paragraph.

NEW YORK ( TheStreet) -- Last week, Elon Musk tweeted Tesla Motors (TSLA - Get Report) had big news. The announcement Monday about the company being profitable isn't it, but it's big news to Wall Street as the stock is soaring on this news.

Tesla announced Monday that sales of its Model S vehicle have exceeded the target provided in mid-February, as the company sold more than 4,750 Model S vehicles in the first quarter, up from a previous outlook of 4,500 cars. As such, the company raised its first quarter outlook to "full profitability" on a non-GAAP and GAAP basis. Tesla had previously said it expected to be "slightly positive net income, on a non-GAAP basis. We also expect to be near breakeven on cash flow from operations." It expected gross margins will be in the mid-teens, ultimately rising toward 25% in the second half of the year.

Barclays Capital analyst Brian A. Johnson noted the announcement should put to rest the concern about the company's profit potential.

"In our view, while we had expected profitability in 2Q13, turning the corner on profitability should put to rest some of the market concerns around profit potential after soft gross margin performance in 4Q12," Johnson wrote in a note. He rates shares "overweight" with a $38 price target.

"I am incredibly proud of the Tesla team for their outstanding work. There have been many car startups over the past several decades, but profitability is what makes a company real. Tesla is here to stay and keep fighting for the electric car revolution," said CEO Musk in a press release.

The company also announced that the small battery for the Model S will not go into production, citing a lack of demand. The customers who chose the 40 kWh battery pack will now receive the 60 kWh pack, but the software will be limited to 40 kWh and can be upgraded upon request. Also of note, the company announced that all 60 kWh cars have been and will be built with Supercharger hardware included.

Following the announcement, Musk tweeted that the news coming out Tuesday "is arguably more important." Jefferies analyst Elaine Kwei believes that given the hype surrounding Monday's announcement as well as the upcoming news, she expects "a high level of media attention over the next several days and correspondingly higher levels of activity in the stock."

Tesla shares were jumping in early Monday trading, up 20.93% to $45.82.

-- Written by Chris Ciaccia in New York

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,289.69 -127.16 -0.73%
S&P 500 2,011.44 -9.81 -0.49%
NASDAQ 4,670.7030 -12.7040 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs