Why you can’t bet against Tesla
Since the start of the year, the stock has risen 280%; inthe last three months, it's gone up 140%. Since today's open, it has gone up15%.
What's driving Tesla? Right now, it's an earnings story.
The company reported its quarterly financial numbers afterthe market close yesterday. Revenues were $405 million versus $27 million ayear before. That's a 1,400% increase in sales. Meanwhile, earnings were $0.20per share, compared to losses of $0.89 last year this time. Both were abovewhat Wall Street analysts expected.
Tesla also said it is increasing its production capacity to500 cars per week. Not by 500, but to500. Even if one were to assume they sold each one for $100,000 (and they don't;MSRP on the low end is close to $60,000), they would have to sell each one at100% profit for the next seven years to justify its market cap of $17.75billion.
And, that doesn't even account for the fact that Tesla guaranteesits resale value after three years. That means some money may be going out. It'salso the reason the company can't recognize the full revenue of its sales.
All this has led Barclays Equity Research department to be abit nervous about its current prices. Today, they released a report summing uptheir entire view: "Compelling upside potential, but fairly valued; Downgradeto Equal Weight".
So, is Tesla fairly valued, overvalued, or undervalued?Weighing in are Steve Cortes, founder of Veracruz TJM, and JC O'Hara, ChiefMarket Technician at FBN Securities. They look at the fundamentals and chartsof Tesla to determine if it's ready to charge.
To see Cortes and O'Haraanalyze Tesla, watch the video above.