Tesla Does Record Deliveries, Stock Surges
T’was a great day for Tesla stock owners, a great day indeed.
Releasing their quarterly numbers on car deliveries, Tesla in its release on Sunday, stated a record delivery of 25,418 vehicles for the quarter ending March 31st. The number being a 69% increase from last year, and 8.16% higher than the estimates put forth from Goldman Sachs. Having faced previous criticisms from investors with regards to its inability to meet consumer demands, Tesla has been under consistent pressure to meet the basic economics of the market, being matching supply to its demand.
With the numbers on display this quarter, Tesla has shown its propensity to expand its production capabilities, giving its shareholders and fans alike something to cheer about!
Opening at $286.90, 3% up from last week’s market close, Tesla’s shares continued to skyrocket up, breaking its record highs to establish itself even closer to the $300 mark. At market close Tesla shares were up 7.27%, at $298.52, with the after hours activity continuing to show its upward trend.
“This beat shows that they are managing production better and that it bodes well for the Model 3 to be on time as well,” said Ivan Feinseth, director of research at Tigress Financial Partners.
Delivering 76,230 vehicles last year, Tesla had failed to achieve its target of meeting 80,000- to 90,000-units due to its limitations with regards to production. This and other setbacks, which had made investors doubt Tesla’s ability to manufacture the ‘hot-and-in-demand‘ Model 3 until late 2018, seems had kept Tesla’s stock from roaring away, and leaving GM and Ford in the dust.
CEO and visionnaire extraordinaire Elon Musk, in February, had reassured investors and fans alike that the Model 3 was on track to hit its production targets by September this year. A midsize, mass-market sedan, the Model 3 has already received over 350,000 advance orders as of April last year, and is expected to be available for sale later this year.
With Tesla stock seeing extremely heavy trading volumes, with approximately 13.7M shares trading, well over the average 5.27M, it finally surpassed Ford and GM in terms of market value. Ford’s shares saw a 2.6% drop, while GM fell over 4% following their monthly sales reports.
The more interesting question now lies in whether investors still see a massive upside in a company currently trading at almost 115 times its earnings, in an industry where the average PE ratio is 11-15 times.
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