Investor's Corner

Wall St. on Tesla Model 3 ramp after seeing Musk’s success with SpaceX

Shares of Tesla (NASDAQ: TSLA) were up 2.45%, trading at $342.16 after the opening bell on Wednesday. Despite the volatility in the US stock market during the first two days of the week, investor sentiment towards Tesla appears to have remained positive, as the company prepares to hold its Q4 2017 earnings call today.

After finishing deep in the red on Monday, the stock market began recovering during the latter half of Tuesday, with the Dow climbing 2.3% during the last 90 minutes of trading, exhibiting the largest one-day point gain since August 2015. The S&P rose 1.7% as well, while the tech-heavy Nasdaq climbed 2.1%. Tesla’s stocks seemed to follow the market’s trend during Tuesday trading, dipping at one point to a low $327 but finishing the day at $333.96 per share.

Tesla’s resiliency and apparent recovery amid the volatile US stock market has impressed ARK Investment Management CEO Catherine D. Wood, who recently spoke on CNBC about her positive outlook on the California-based electric car maker and energy company. According to the CEO, her team is confident about Tesla’s eventual success. Quite interestingly, Wood said that Tesla’s potential was recently highlighted by Elon Musk’s feat of sending his Roadster to space during the Falcon Heavy’s test flight.

“We think that if Elon Musk, if SpaceX, can do what they did yesterday in space, they’re gonna be able to produce the Model 3,” she said.

The ARK CEO further expressed her team’s long-term prediction for the Silicon Valley-based firm, stating that the rise of Tesla’s shares in the stock market is nowhere near done. Wood even went so far that even if Tesla starts falling, the company’s shares will still be valued higher than what they are today.

“If we’re right, this stock, in our models, is going to $4,000. And if we’re wrong, and all they do is electric, our bear case is $600.”

According to analysts polled by FactSet, Tesla is expected to report an adjusted loss of $3.04 a share on sales of $3.3 billion in the quarter, a significant difference from its figures the previous year. By comparison, the California-based electric car maker and energy firm posted an adjusted loss of 69 cents a share on sales of $2.3 billion during Q4 2016. Still, Tesla shares have gained 42% in the past 12 months, more than doubling gains for the S&P 500 index Dow Jones Industrial Average.

Tesla ended Q4 2017 by hitting a number of milestones. Deliveries for the Model S and the Model X reached new records, exceeding the company’s initial target of delivering 100,000 cars within the year. Two new vehicles — the Tesla Semi and the next-generation Roadster — were also revealed. Apart from these, the pace of Model 3 deliveries also improved significantly, with Tesla stating that during the final days of December, the production of the mass market compact electric sedan extrapolated to over 1,000 units per week.

Wall St. on Tesla Model 3 ramp after seeing Musk’s success with SpaceX
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