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Why Is Tesla (TSLA) Stock Soaring Today?

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Despite announcing misses for both earnings and revenue yesterday, Tesla Motors TSLA is soaring today, with shares prices up nearly 7.5% in morning trading. Today's action is being driven by the company's positive outlook for 2016.

Initially, it looked like a bad earnings report for Tesla. The company missed on earnings by a wide margin, reporting an adjusted EPS of -$1.29 against the Zacks Consensus Estimate of -$0.34. Revenues missed on a narrower margin, with Tesla reporting $1.75 billion against the estimated $1.78 billion.

Nevertheless, the stock climbed due to the amount of auto deliveries in 2015, and more importantly, the company's projections for 2016. Tesla delivered 17,272 Model S Cars, which was up 79% year over year and above expectations, and 206 Model X SUVs, which was right in-line.

Furthermore, Tesla expects total deliveries of 80-90K in 2016, which reaffirms sales growth of 60%-80% and represents sales of about 1600-1800 cars per week. The company's lithium ion producing Gigafactory is also on schedule.

Tesla's total sales projections should be guided by the release of its new Model 3 car on March 31, 2016. With a starting price of $35,000, not including clean energy benefits, the Model 3 is a much more affordable Tesla and should appeal to a wider audience.

Although Tesla has been in a rough patch, this outlook is an important piece of positive news. Today's trading activity indicates that investors are excited about what the future holds for the company.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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