NEW YORK (TheStreet) -- Shares of Tesla Motors are up 0.56% to $193 in early market trading despite a cautious note by analysts at Morgan Stanley this morning, saying the electric car maker faces risks from CEO Elon Musk's ambition. Morgan Stanley analysts said Musk's comments about not achieving U.S. GAAP profitability until 2020 could imply leasing and stock compensation estimates that differ from the firm's forecasts. The firm said his comments could also point to capital expenditures and R&D that "vastly" exceed the firm's expectations as Musk pursues his mission to bring electric cars to the masses. Exclusive Report: Jim Cramer's Best Stocks for 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Analysts are cautious and wonder if Musk's ambition could make the company the "Amazon of electric vehicles." The firm lowered its price target on the stock to $280 from $290 citing risks associated with Musk's ambitions, as well as foreign exchange impacts and lower China shipments. However, Morgan Stanley sees the recent pullback in the stock as a buying opportunity and maintained its "overweight" rating. Palo Alto, CA-based Tesla designs, develops, manufactures and sells electric vehicles and advanced electric vehicle powertrain components. Separately, TheStreet Ratings team rates TESLA MOTORS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: "We rate TESLA MOTORS INC (TSLA) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and generally high debt management risk." Highlights from the analysis by TheStreet Ratings Team goes as follows: The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Automobiles industry. The net income has significantly decreased by 94.1% when compared to the same quarter one year ago, falling from -$38.50 million to -$74.71 million. Net operating cash flow has significantly decreased to -$28.00 million or 127.35% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower. The debt-to-equity ratio is very high at 2.60 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, TSLA's quick ratio is somewhat strong at 1.38, demonstrating the ability to handle short-term liquidity needs. Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Automobiles industry and the overall market, TESLA MOTORS INC's return on equity significantly trails that of both the industry average and the S&P 500. Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year. You can view the full analysis from the report here: TSLA Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Click to view a price quote on TSLA. Click to research the Automotive industry.
from Latest TSC Headlines http://ift.tt/1CbsA5f
No comments:
Post a Comment