Tesla Motors (TSLA) Strong In Pre-Market Trading

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Tesla Motors ( TSLA) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Tesla Motors as such a stock due to the following factors:

  • TSLA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $1.3 billion.
  • TSLA traded 79,537 shares today in the pre-market hours as of 8:00 AM.
  • TSLA is up 4.6% today from Friday's close.

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More details on TSLA:

Tesla Motors, Inc. designs, develops, manufactures, and sells electric vehicles, electric vehicle powertrain components, and stationary energy storage systems in the United States, China, Norway, and internationally. Currently there are 8 analysts that rate Tesla Motors a buy, 3 analysts rate it a sell, and 4 rate it a hold.

The average volume for Tesla Motors has been 5.3 million shares per day over the past 30 days. Tesla has a market cap of $28.6 billion and is part of the consumer goods sector and automotive industry. Shares are up 1.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Tesla Motors as a sell. 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 ratings report include:
  • 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.

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