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Tesla Shares Have Hurdles To Clear In Order To Really Start Motoring

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Tesla Shares Have Hurdles To Clear In Order To Really Start Motoring
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Tesla Motors Inc (NASDAQ: TSLA) have been trying to recover along with the rest of the high-beta part of the equity markets, but is failing thus far to threaten previous highs. That alone makes Tesla shares laggards in the short term, as the equity indices have been setting new all-time highs almost on a daily basis recently.

Can Elon Musk muster more genius moves to propel the company's stock to new heights?

What The Bulls See

  • Massive 65 percent revenue growth projections.
  • Huge 200+ percent EPS growth projections.
  • A revolutionary product.
  • A "genius" CEO.

Related Link: Why Tesla's Undisclosed SEC Probe Is 'Just A Rumor'

What The Bears See

  • Tesla is still losing money, despite the rapid revenue growth.
  • Expensive valuation metrics: A price-to-book of 32.28, a price-to-sales of 10.83, a PE of 90 –- even though it is offset by 65 percent estimated 2015 revenue growth and estimated EPS growth of north of 200 percent.
  • High debt as evidenced by the 257 percent debt-to-equity ratio.
  • Negative levered free cash flows annually at this point in time.

The Technical Take

Technicians note that at $248 and change, Tesla shares are somewhat in the middle of "no-man's land" between the recent low at $214.24 and its first key resistance at $265.54. If the stock can continue to climb through the holiday season, it may be able to breakout above resistance and make a run up to all-time highs at $291.42.

On the other hand, a breakdown below $214.24 may lead to a cascade lower to the $182-$194 range.

Shares traded at $248.96, up 0.9 percent, at time of publication.

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Posted-In: Long Ideas Technicals Intraday Update Trading Ideas Best of Benzinga

 

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