NEW YORK (TheStreet) -- Tesla Motors (TSLA) - Get Report shares are up 0.9% to $192.44 in trading on Tuesday as the electric vehicle manufacturer headed by Elon Musk continues to rally one day after a cryptically optimistic tweet from Musk sent the stock soaring yesterday.
Tesla shares fell as low as $181.80 in trading yesterday before Musk tweeted "Major new Tesla product line - not a car - will be unveiled at our Hawthorne Design Studio on Thurs 8pm, April 30," which sent the stock soaring to close at $190.57 yesterday.
The tweet, which was retweeted thousands of times by Musk's nearly 2 million followers, sparked the twitter hashtag #TeslaNewProductGuesses. The tweet was responsible for a $900 million increase in the company's market cap, according to estimates by the Telegraph.
Tesla shares were falling earlier Monday following reports that the company was revamping its China sales strategy amid weak sales due to consumer concerns about the range of the electric vehicles and the network of charging stations in the country.
The Street's Jim Cramer, host of CNBC's Mad Money, sat down with Scott Keogh, president of Audi of America, in Audi's showroom for an interview that will air tonight. Cramer had this to say about Musk and Tesla.
"I don't know which part of business Musk knows to run best: rockets, cars, or stocks. All I know is that I just checked out the new Audis and their EVs have no range anxiety."
Separately, TheStreet Ratings team rates TESLA MOTORS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate TESLA MOTORS INC (TSLA) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, poor profit margins and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Automobiles industry. The net income has significantly decreased by 561.8% when compared to the same quarter one year ago, falling from -$16.26 million to -$107.63 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. 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.
- Net operating cash flow has significantly decreased to -$86.40 million or 166.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for TESLA MOTORS INC is currently lower than what is desirable, coming in at 34.46%. Regardless of TSLA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, TSLA's net profit margin of -11.25% significantly underperformed when compared to the industry average.
- The debt-to-equity ratio is very high at 2.51 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, TSLA's quick ratio is somewhat strong at 1.02, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: TSLA Ratings Report