Market Overview

Is Tesla's Slide Something To Worry About?

Is Tesla's Slide Something To Worry About?
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Since the start of the year, shares of Tesla Motors Inc (NASDAQ: TSLA) have fallen 13.4 percent as market turmoil weighed on investors' minds.

However, with prices low, many are wondering whether now is a buying opportunity to snap up shares of the automaker while they're cheap, or if the company is in for a rocky year.

Could Be A Bumper Year

Some are betting that Tesla is poised to have an impressive year as the company began 2016 with a new production line as well as a highly anticipated new vehicle.

These two factors are likely ramp up sales, even as early as the first quarter. Another optimistic prediction for Tesla is an influx of cash. In 2015, CEO Elon Musk said he planned for the company to be cash flow positive by the end of the year.

Related Link: Tesla Has A 10-Year Technology Lead On Competition, Analyst Says

However, when that didn't happen, many investors said they saw 2016 as the year the firm will become cash flow positive as its new Model X vehicles are expected to bring in a great deal of revenue.

Still Some Concern

On the other hand, there are many who look at Tesla as a risky play. Firstly, the market's decline in recent days saw Tesla's stock fall three times more than indexes like the Nasdaq or the S&P 500.

This was concerning because just before the fall, Tesla announced that it met its unit delivery goals for 2015 and that its Gigafactory was up and running. With good news on the table, some were surprised to see the automaker's stock fall so rapidly.

Not only that, but Tesla's Model S was recently given a worse than average rating by Consumer Reports, something that could affect sales. The electric car space is becoming more and more crowded as several companies now offer competing vehicles.

Companies like Ford Motor Company (NYSE: F) are planning to unveil a new line of electric cars in the coming years, which could take away from Tesla's shine.

Posted-In: Tesla Tesla Model S Tesla stockLong Ideas Short Ideas Markets Tech Trading Ideas Best of Benzinga


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