The Argument For Why No One Cares About Tesla's Delivery Disappointment

Tesla Motors IncTSLAtrade lower by 2 percent during Tuesday's after-hours session following the company's announcement that it missed its deliveries target yet again.

Tesla said that it delivered 22,000 vehicles in the fourth quarter, which came in more than 10 percent short of some Wall Street analyst's expectations.

Given Tesla's pattern of falling short of expectations over the years, investors were buying Tesla's stock Wednesday morning, as it not only erased Tuesday's after-hours decline but was trading higher by more than 3 percent.

Barron's quoted Ben Kallo, an analyst with Baird, who explained why it doesn't really matter for investors that Tesla missed the mark.

Analyst Commentary

Kallo noted that Tesla's fourth-quarter deliveries of 22,000 vehicles were 11 percent lower than his expectations but still an increase of 27 percent over the same quarter a year ago.

Tesla noted that it suffered from production delays due to a hardware transition, but the analyst believes at least 6,400 vehicles are in transit to customers. It is important to note, Tesla only records a delivery once the client is in full possession of their car.

Kallo also recommends Tesla's shareholders Buy the stock ahead of the upcoming production ramp of the more affordable Model 3 sedan.