Beleaguered auto industry stock Tesla has turned around a six-session losing streak with a 1.43% gain at the close on Thursday. Tesla has been rocked by scandals in recent months, with CEO Elon Musk falling afoul of SEC regulations on more than one occasion.
The company now reports that its electric vehicle order numbers are increasing, which could inject new life into the stock.
Leaked Email Has Promising News
A leaked email from CEO Elon Musk to Tesla employees said that the company is on track to have a new record quarter. According to the Email, the company “had over 50,000 net new orders for this quarter. Based on current trends, we have a good chance of exceeding the record 90,700 deliveries of Q3 last year and making this the highest deliveries/sales quarter in Tesla history!”
The internal email was leaked and spread across social media on Wednesday and has since been authenticated by news sources like Reuters.
Tesla’s milestone 2018 holiday quarter was followed by a 31% decline in deliveries in Q1, and a warning that profits could be delayed until the second half of this year. Analysts are split on their ratings for Tesla. While the average target price of $290.45 is promising, only 10 of 32 top analysts recorded by FactSet recommend a BUY rating on the stock.
Tesla Performance in 2019
The stock market has rallied in 2019, thanks to a fresh wave of confidence after the Christmas trading period. Tesla has not benefited from the rally, failing to perform against both the S&P 500 and its own industry.
Tesla’s recent stock performance is shown below:
- YTD Stock Growth -41.26%
- 3 Month Stock Growth -32.87%
- 1 Month Stock Growth -21.06%
While most investors clearly don’t have confidence in the stock, there’s still a strong case for buying and holding it for potential future returns. The company is currently one of the leading electric vehicle manufacturers and it is expanding its worldwide operations. Tesla is currently building a new factory in China, which will allow it to take advantage of a growing market without worrying about tariffs and other trade barriers.
Tesla does have long term potential, but it needs to produce consistent sales and delivery numbers for the larger investment market to take note. With stock price currently close to its 52-week low, now could be a good opportunity for investors who want to bet against the tide and stay for the long-term.
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