Perilous Reversal Watch: Tesla Motors (TSLA)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Tesla Motors (TSLA) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Tesla Motors as such a stock due to the following factors:
- TSLA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $1.9 billion.
- TSLA has traded 475,113 shares today.
- TSLA is down 3.6% today.
- TSLA was up 16.5% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in TSLA with the Ticky from Trade-Ideas. See the FREE profile for TSLA NOW at Trade-IdeasMore details on TSLA: Tesla Motors, Inc. designs, develops, manufactures, and sells electric vehicles and electric vehicle powertrain components. Currently there are 7 analysts that rate Tesla Motors a buy, 1 analyst rates it a sell, and 4 rate it a hold.The average volume for Tesla Motors has been 11.8 million shares per day over the past 30 days. Tesla has a market cap of $15.2 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 0.75 and a short float of 34.3% with 1.86 days to cover. Shares are up 266.6% year-to-date as of the close of trading on Tuesday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Tesla Motors as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins.Highlights from the ratings report include:
- The debt-to-equity ratio of 1.20 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, TSLA maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
- The gross profit margin for TESLA MOTORS INC is currently lower than what is desirable, coming in at 30.44%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, TSLA's net profit margin of -8.92% significantly underperformed when compared to the industry average.
- Compared to other companies in the Automobiles industry and the overall market, TESLA MOTORS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- TESLA MOTORS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TESLA MOTORS INC reported poor results of -$3.70 versus -$2.52 in the prior year. This year, the market expects an improvement in earnings ($0.57 versus -$3.70).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 65.3% when compared to the same quarter one year prior, rising from -$110.81 million to -$38.50 million.
- You can view the full Tesla Motors Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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