Tesla Motors Inc TSLA 1.61% initially surged more than 4.0 percent in Wednesday’s after-hours session following a Q1 earnings report mostly in line with Wall Street expectations. However, the stock has plummeted more than 5 percent in Thursday’s session after the market had a bit more time to digest what it saw from Tesla.
The big initial driver of market excitement following Tesla’s report was the company’s guidance that it plans to ship 500,000 vehicles per year by 2018, two years ahead of its previous 2020 estimate.
The company also demonstrated extremely strong 45 percent year-over-year sales growth.
So why the selloff? After the widely-publicized success of the Model 3 launch earlier this quarter, earnings may be the last major catalyst for Tesla for a while, and traders could simply be taking the opportunity to lock in huge gains in recent months. Even after Thursday’s drop, Tesla is still up 32.0 percent in the past three months.
Outside of profit-taking, the market may be concerned about Tesla’s ambitious guidance.
Tesla still anticipates shipping 80,000 to 90,000 vehicles in 2016, despite the fact that it missed its Q1 shipping guidance, shipping 14,820 vehicles in Q1, over 1,000 vehicles short its 16,000-vehicle projection.
In addition, news broke…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
