Tesla Inc (NASDAQ:TSLA) shares continue to wildly outperform the major averages. The stock has been ramping of late, and has been a stalwart performer basically ever since it blew away Q3 numbers and surprised the sell-side by posting a profit in the quarter.
The key in our analysis is about positioning. The peculiar factor for TSLA investors is the entrenched bear contingent, led by some very visible and high-profile names, such as David Einhorn and Jim Chanos. That element suggests the ever-present specter of a possible capitulation – a “give-up” – by the doubters, which would seem to be in order if it seems at all possible that the company might surprise on the upside again in Q4 when the numbers hit.
Tesla Inc (NASDAQ:TSLA) has notoriously fought its way back from possible oblivion earlier this year, when it looked like the company may have bitten off more than it could chew with the extremely tight-margin prospects of ramping up the production of the Model 3 to make it a truly accessible mass-consumer product.
Musk, himself, said there were times when he almost gave up. But, as far as history now records, they did it.
That’s not to say there doesn’t remain controversy. The bears will contend accounting fraud, manipulation, misstatements, and any range of possible explanations that avoid accepting that hard work and inspired problem solving might have actually succeeded. And they may be right. No one knows for sure.
However, as we see it, the street is going to have to ramp its price targets in front of the next report in February. And, when that happens, this stock could become the true darling of the market given how it has acted through the course of the recent corrective period for the S&P and Nasdaq.
That’s a potential recipe for disaster for even the staunchest of bears. At some point, market dynamics, right or wrong, take over control of the tape, especially in a stock that stands at the heart of such an emotionally charged trading landscape.
We would wish good luck to all involved. But, in this case, it really seems like that’s an empty gesture. One side is going to win in striking fashion. And the other is going to lose just as dramatically.
Tesla Inc (NASDAQ:TSLA) frames itself as a company that designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally.
The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles.
It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries.
The Energy Generation and Storage segment offers energy storage products, such as rechargeable lithium-ion battery systems for use in homes, commercial facilities, and utility grids; designs, manufactures, installs, maintains, leases, and sells solar energy systems to residential and commercial customers; and sell renewable energy to residential and commercial customers.
The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California.
Tesla Inc (NASDAQ:TSLA) generated sales of $6.8B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 70.5% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($3.1B against $9.8B, respectively).