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

Tesla Motors Inc (TSLA): Best Momentum Stock Or Problem?

Stocks in this article: TSLA

It seems like shares of Tesla Motors Inc TSLA just won't quit, but some think it's time for investors to slow down

Tesla Motors Inc (TSLA) shares have been back on a tear over the last several months, rising by 80% year to date and hovering near their all-time high. Meanwhile the broader stock market has stalled and begun to slump today, especially after the latest news out of Ukraine, although Tesla is down just .3% as of this writing. So is this the time to keep hitting the gas on Tesla stock, or is it time to let off the accelerator? As always, it depends on who you ask.

Why Tesla stock has momentum

So why have investors been snatching up shares of Tesla Motors like they’re going out of style? Fortune’s Alex Taylor III offers a few reasons, like the fact that the automaker’s running a hot and heavy competition among a handful of states about where it will put its gigafactory. In addition, Tesla’s order backlog is up to $226 million. With a production rate of 1,000 cars per week, which management expects by the end of this year, that amount will keep the automaker filling orders for 30 weeks without even accepting any more orders.

In addition, Tesla Motors Inc (TSLA) says its sales per square foot in its showrooms are twice that of Apple Inc. (AAPL).

Trouble ahead for Tesla?

The problem, however, is that bears think Tesla stock is already priced as if it is selling hundreds of thousands of cars annually. The article in Fortune puts this into perspective: investors are valuing every car the automaker sells at $1 million. So Wall Street is also banking on the automaker delivering on its promises years into the future—so much so that Tesla’s promises are worth more than real results from other luxury automakers.

1 of 3

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!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

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