NEW YORK (TheStreet) -- The world of financial writing can be a lonely place, especially when you're wrong.
I don't enjoy it when people lose their shirts trading, and I take a lot of pride in knowing that I did my best to mitigate the damage.
And this brings us to Tesla Motors (TSLA - Get Report). On two occasions I have advised investors to look both ways before buying the stock. It was clear that, despite what the technicals might have said, the fundamentals are what's in the drivers seat. On Wednesday, the fundamentals took a wrong turn.
After the close Wednesday, Tesla reported first-quarter results that missed on both revenue and profits. The electric car maker reversed a year-ago profit of 10 cents to an operating loss of $49.8 million, or 40 cents per share.Management attributed the loss to costs associated with the company accelerating the development of its new crossover. Analysts, meanwhile, were looking for an 8-cent profit. Equally disappointing was the revenue. Despite the 10% year-over-year jump, it still missed the mark by more than 9%. On the bright side, the company said it produced 7,535 Model S sedans during the quarter, a company record. Also encouraging: 86% of the vehicles were delivered to customers. But this was not enough to appease investors -- many of whom were spooked by Tesla's rising costs. Some notable expenses were in the areas of research and development , which surged 49% year over year to $81.5 million. And this goes back to what I've said about how Tesla seems to be in "no man's land." Should Tesla be viewed as a tech company in realm of Amazon (AMZN), which is also incurring higher expenses? Or are we to assess Tesla by the standards of General Motors (GM) and Ford (F), which have never had such a significant jump in R&D from one year to the next? Tesla has big ambitions, including the $5 billion Gigafactory facility announced in February, which will produce lithium-ion batteries. Next year management will launch the Model X crossover and wants to adapt the Model S for a growing number of international markets. There are also goals for the United Kingdom, where Tesla plans to launch a right-hand-drive Model S in June. The company wants to do the same for Hong Kong later this summer.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts