Tesla Motors (TSLA) Stock Stalls Today on February Registrations, Import Data
NEW YORK (TheStreet) -- Shares of Tesla Motors (TSLA) - Get Report are lower in pre-market trading today, down 0.92% to $188.65, as registrations of the electric vehicle makers' Model S sedans in China fell 45% in February from the previous month, according to JL Warren Capital, a China focused equity research firm.
The February registrations total was 260, down from 469 in January, according to data released Thursday by JL Warren, Bloomberg reported. The research firm also noted that Tesla imported 63 of the all-electric luxury cars to China in February after importing just 10 in January, but down from hundreds reported during last year's fourth quarter.
"We consider units shipped one of the measures of monthly incremental demand strength in the Model S," head of research at JL Warren Capital Junheng Li told Bloomberg. "The data suggests sharp weakening in the demand," Li added.
Tesla forecast worldwide sales of about 55,000 cars this year, up 74% from last year, without giving any specific details for China. The company's CEO Elon Musk remains confident of its long-term prospects in China.
"Even if our sales in China were zero this year, zero, I'm still confident we can do the 55,000 cars. They won't be zero," Musk told analysts on a February 11 conference call.
Separately, the company also said recently that its cars were approved for a program in Shenzhen, China that sets aside license plates for new-energy vehicles, which could give the automaker a much needed boost in a critical market where sales have come up short of expectations.
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
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