Tesla Motors (TSLA) might be the hardest large cap stock on the market to peg. The electric car maker has consistently circumvented the expectations of analysts, whether by underperforming greatly or - as they did in the first quarter of 2013 - tripling expectations and turning a $15 million profit. Tesla reports second quarter earnings after the bell on Aug. 7, and analysts differ wildly in their projections, with calls for losses anywhere between 5 cents and 29 cents a share. But if prior quarters are any indication, the actual earnings will be a surprise to stockholders – pleasant or not.
Dan Galves of Deutsche Bank holds a price target of $160 for the stock. Litchfield Hills Research raised their price target from $100 to $188. And Andrea James of Dougherty & Co. raised her price target from $90 to $200. Conversely, William Coldus of Koldus Contrarian Investments calls Tesla a “terrific shorting opportunity” and says the stock is massively overvalued.
The stock currently sits at $134.18 and is down 5.61 percent prior to the earnings report. The stock is already up over 300 percent year-to-date.
Tesla has long been a divisive subject for investors. The company has lost money every quarter save Q1 2013, when it posted its first ever profit in its 10 year existence. But while the company proved it could turn a profit, Tesla’s products are also expensive and still cater to a niche market that is out of reach for average consumers
That isn’t to say their products don’t attract significant attention. The company produced the first entirely electric sports car, the Tesla Roadster. While its price tag of $109,00 puts it firmly in the “toys of the upper class” category, the car still sells reasonably well. Overall Tesla's entire product line is expected to move 21,000 units by the end of 2013, up from the 20,000 the company initially reported at the beginning of the year.
Much of Tesla’ success is attributed to charismatic CEO Elon Musk, a Wharton School graduate and the company's co-founder. Young, successful, and fascinated with high-end tech innovation, Musk was reportedly an inspiration for Robert Downey Jr.’s portrayal of Iron Man entrepreneur/billionaire playboy Tony Stark. British paper The Independent went as far as to compare Musk to the legendary founder of Ford Motor Company (F) Henry Ford in his quest to revolutionize the car business.
Musk doesn’t downplay the connection: the names of two of Tesla's major products, the flagship Model S and the in-development Model X, are obvious nods to Ford’s famous Model T.
Tesla absolutely destroyed earnings expectations, once again surprising investors end experts alike by posting earnings 39 cents a share better than analyst consensus. The company was expected to post an earnings loss, but instead rang in great numbers again, making it two quarter in a row the carmaker has been profitable. The stock in turn is up a whopping 15 percent in after-hours trading.
For their second quarter 2013 earnings report, Tesla reported net income of $26 million, or $.20 per share, versus the net loss of $93.2 million, or -$0.89 per share, from the same period a year ago. Revenue for the quarter was $405 million, as compared to $26.7 million from the previous year. Analysts were expecting a loss of $0.19 per share on revenues of $383.4 million.
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