Why Tesla Motors (TSLA) Stock Is Down Today

NEW YORK (TheStreet) -- Shares of Tesla Motors Inc.  (TSLA) are down -3.57% to $199.98. The electric vehicle manufacturer reports 2014 first quarter earnings results after today's market close. 

The company could report earnings of 7 cents per share, excluding some items, according to the average of 10 analysts' estimates compiled by Bloomberg.

A year ago Tesla earned 12 cents per share on the same basis, its first ever profit, helped by a surge in California zero-emission vehicle credit sales and savings from the early repayment of a federal loan, Bloomberg noted.

Analysts project a loss on a GAAP basis.

Revenue may reach a record $704.5 million, the average estimate of 10 analysts surveyed by Bloomberg, up 25% from $561.8 million a year ago.

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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. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TSLA's very impressive revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues leaped by 100.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.91, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.33, which illustrates the ability to avoid short-term cash problems.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength 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.
  • The gross profit margin for TESLA MOTORS INC is currently lower than what is desirable, coming in at 31.56%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -2.64% trails the industry average.
  • You can view the full analysis from the report here: TSLA Ratings Report
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