Tesla's Growth Is 'Astounding,' But The Company Needs Another 'Blowout Quarter,' Expert Says

Investors are eager to hear what Tesla Motors Inc TSLA will announce when it reports after the market close on Wednesday. The company has been great at driving headlines, but it might need a little more than that to inspire investors this quarter.

"Tesla's growth itself is astounding," Cody Willard, chairman of Scutify (a financial social network), told Benzinga.

"That's what the valuation reflects and keeps the stock up anywhere near its highs. Relatively speaking, as it is right now, it's going to take another blowout quarter."

Willard said Tesla needs to beat top-line estimates by 10 to 20 percent.

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Ups And Downs

Despite Tesla's success, the stock has fallen more than 12 percent over the last six months. It is down more than 2 percent year-to-date.

Willard said that the timing of Tesla's decline coincided with statements by CEO Elon Musk, who told reporters that investors get carried away with the firm's stock price. "The stock was down the next day maybe five or 10 percent," said Willard. "I don't think it has ever recovered."

Musk likely knew that his comments could impact the stock's price, but Willard does not believe he was attempting to reduce Tesla's value.

"I think he was just answering the question honestly," said Willard.

Thousands Of Cars

Can Tesla really sell 500,000 cars per year starting in 2020?

"With the subsidies, it's possible," said Willard. "Without the subsidies, the company would be facing serious cash flow and balance sheet questions."

As far as pricing is concerned, Willard doesn't think that the Model 3 (which could retail for as much as $40,000) is too expensive.

"It's close enough to mainstream pricing," he said. "[If] you take the low-end Corolla and end up buying every feature and upgrade you can get, it'll cost you more than $35,000 to $40,000."

In that sense, the Model 3 might seem like a bargain.

"As a consumer, I would much rather buy a car that would probably have cachet," Willard added. "People are going to be like, 'Wow, that's cool.' And it's probably going to maintain its value because it is unique and [it is] one of the first ones, while there are [millions of] Corollas on the road."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.