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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Tesla's Biggest Victory Yet (Update 1)

Tesla's incredible run this year (it's now a $14 billion market cap company) is fueled not only by the fervor for its cars, but surprise at the company's achievements. There was an epic short squeeze earlier in the year, as shorts cried in pain when Tesla announced it was profitable for the first time ever. Then, the company raised capital to take advantage of the high stock price, and the stock went even higher! It's been nothing short of an incredible run for Tesla in 2013, and this latest bit of news adds further credence to the story.

TSLA ChartTSLA data by YCharts

Demand has been so high for the Model S that the company raised global deliveries guidance on its last earnings report. It now expects to deliver 21,000 vehicles this year, up from a prior goal of 20,000 cars.

Not only are Tesla fans showing interest in the product, but so is the general public. Consumer Reports gave the Model S a near-perfect score of 99, citing the car's power, handling, and interior.

Analysts are falling over themselves to raise price targets on Tesla. One analyst went so far as to call Tesla America's fourth automaker, behind Ford Motors (F), General Motors (GM) and Chrysler. The hype surrounding this company is approaching, and in some cases, has surpassed Apple (AAPL) levels. Judging by the results, it's clearly warranted.

Not everyone believes the hype, though. Bank of America Merrill Lynch analyst John Lovallo, who rates shares "underperform" with a $39 price objective, believes the optimism surrounding the company might be unwarranted. "[W]e estimate that a $120 share price implies over 321K vehicle sales in 2020, which is a full 300K units higher than our current 2013e and would represent a 7-year CAGR of 48%," Lovallo wrote in the note. Current estimates imply Tesla would be able to achieve EBIT (earnings before interest and taxes) margins of 12.5% in 2020, nearly 380 basis points more than its closest competitors, BMW, Mercedes, Audi, Bentley, and Porsche, generated in 2012, and more than 400 basis points better than the group is expected to generate in 2015. "While nothing is impossible, particularly with Elon Musk at the helm, we believe these assumptions warrant a healthy degree of skepticism," Lovallo wrote.

Tesla's story has come an incredibly long way over the past seven months. It's raised 2013 guidance based of demand. Musk has seemingly become the next Steve Jobs, with his ability to cater to fan boys, investors and the media alike. Lastly, the company is taking the world by storm, and revolutionizing the automobile market faster than Henry Ford when he came up with the assembly line.

--Written by Chris Ciaccia in New York

>Contact by Email.

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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