Tesla’s share price is set to take off when trading in New York gets underway later today.
The company posted impressive financial fourth-quarter figures last night. The EPS came in at $2.14, which smashed the $1.72 forecast. Revenue for the period was $7.38 billion, and that topped the $7.02 billion forecast. The group now predicts that net income, along with cash flow, will be positive going forward, but the group did caveat that by saying new productions might put it off course. This was still welcomed by traders though, as it is another sign the company is shaking off its volatile image, and is moving into more stable territory, which is likely to help Tesla's share price.
Tesla aims to increase production
Tesla is aiming to produce at least 500,000 vehicles this year, which would be a 36% jump on last year’s output. The company confirmed that production at its Shanghai operation is going well, and that it hopes to ramp up output. However, the coronavirus situation in China could cause problems for the firm, so traders will be mindful of the health crisis. The auto-maker is expanding its fleet as production has begun on the Model Y, a compact crossover utility vehicle (CUV). Delivery of the first Model Y is expected by the end of March, which would be ahead of schedule.
The group’s solar and energy storage divisions are performing well too. Tesla said it earned $580 million from other services, such as merchandising and vehicle repairs. Admittedly it is a relatively small revenue stream, but it is nice to see it all the same.
Tesla share price hits record high
The Tesla share price topped $500 for the first time in the middle of January. The stock has enjoyed a bullish run in 2020. The fourth-quarter production figures were impressive as the number of vehicles produced was 112,000, which is a record level. Prevously, there were questions about the company’s ability to achieve its full-year production target, which was 360,000-400,000. Thanks to the strong final three months, the auto-maker managed to achieve the lower end of the guidance.
Tesla share price volatility in 2019
The Tesla share price had a volatile run in 2019. The first half of the year was dogged by concerns about the company’s ability to achieve its output goals. Traders were still cautious about the erratic behaviour of the group’s CEO, Elon Musk. The entrepreneur resigned as the chairman in late 2018 in the wake of the claim he would take the company private. Mr Musk was ordered to pay a fine of $20 million by the Securities and Exchange Commission. In light of those events, it’s hardly a surprise that the Tesla share price had a rough ride for the first portion of 2019. When it became clear the company was getting its house in order, and it was making progress in relation to production, then the Tesla share price began to shake off the negative trend. The surprise profit that was revealed in the third quarter set the share price off on its bullish route.
A series of banks and stockbroking firms were quick to raise their price targets for the stock on the back of last night’s numbers. Tesla’s share price has soared recently, but traders need to buckle up as the slightest bump in the road could see the stock spin out.