NEW YORK (TheStreet) -- Shares of Tesla Motors (TSLA) are advancing 2.31% to $254.89 on reports that its Gigafactory in Nevada will receive hundreds of Panasonic (PCRFY) workers to make electric car batteries at the plant, according to Reuters.
"The Gigafactory represents a fundamental change in the way large scale battery production can be realized," Tesla's Chief Technical Officer and co-founder J.B. Straubel said in a statement. "Not only does the Gigafactory enable capacity needed for the Model 3 but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications."
The two companies last year signed an agreement that lays out their cooperation on the construction of a large-scale battery manufacturing plant in the U.S., known as the Gigafactory.
Tesla will prepare, provide and manage the land, buildings and utilities, while Panasonic will manufacture and supply cylindrical lithium-ion cells, the companies said.
Additionally, analysts at Robert W. Baird today increased Tesla's price target to $335 from $275 with a "buy" rating. The raise was due to the fact that investor sentiment about the automotive and energy storage company improving recently. However, some skepticism remains, including Tesla's new energy storage line, the launch of its SUV, and overall demand for its cars and products, analysts at Robert W. Baird said.
However, "We think upcoming events will help improve sentiment and drive shares higher," they noted.
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. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, 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:
- TSLA's very impressive revenue growth greatly exceeded the industry average of 7.3%. Since the same quarter one year prior, revenues leaped by 51.5%. 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.
- 35.88% is the gross profit margin for TESLA MOTORS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -16.40% is in-line with the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 -$131.79 million or 317.33% 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 Ratings Report