NEW YORK (TheStreet) -- Tesla Motors (TSLA) - Get Report shares are changing direction from yesterday's losses, gaining 1.58% to $213.37 on Thursday, after CEO Elon Musk responded to the findings of Consumer Reports' survey, showing that the Model S is not reliable.
On Twitter, Musk stood by his company, saying, "Consumer Reports reliability survey includes a lot of early production cars. Already addressed in new cars."
Afterwards, he tweeted another post, adding, "Tesla gets top rating of any company in service. Most important, CR [Consumer Report] says 97% of owners expect their next car to be a Tesla (the acid test)."
This comes after Consumer Reports on Tuesdayrescinded its recommendation for the Model S after it surveyed 1,400 Model S owners who said that Tesla's cars are less reliable than most.
Respondents complained about several issues, including automatic door handle malfunctions, freezing display screen, and leaking sunroofs.
Separately, TheStreet Ratings team rates TESLA MOTORS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate TESLA MOTORS INC (TSLA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its robust revenue growth -- not just in the most recent periods but in previous quarters as well. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 24.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- TESLA MOTORS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TESLA MOTORS INC reported poor results of -$2.36 versus -$0.71 in the prior year. This year, the market expects an improvement in earnings (-$0.79 versus -$2.36).
- In its most recent trading session, TSLA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for TESLA MOTORS INC is currently lower than what is desirable, coming in at 31.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -19.29% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$159.52 million or 4356.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: TSLA