Why Is Tesla Underperforming in 2016?



Stock price performance

Tesla Motors (TSLA) is set to release its 4Q15 earnings on February 10, 2016. Tesla’s stock outperformed other mainstream automakers in 2015. Tesla gained 7.9% in value last year, while other major US automakers gave negative returns to investors. However, as of February 4, 2016, TSLA has witnessed a sharp fall of about 27% YTD (year-to-date).

So far in 2016, several automakers’ stocks have fallen due to the broader market sell-off. Ford Motor Company (F) has fallen 18.2%, General Motors (GM) has fallen 15.8%, and Toyota (TM) has fallen 7.1%. The Consumer Discretionary Select Sector SPDR ETF (XLY) has also fallen 7.2% YTD.

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Why is Tesla underperforming?

So far in 2016, Tesla has been one of the biggest losers among its peers, as you can see in the chart above. Tesla Motors reported delivery of 17,000 vehicles in 4Q15. This resulted in a total of 51,000 vehicles delivered in 2015. Thus, the company achieved the lower range of its 2015 guidance of 50,000–52,000 deliveries.

Note that previously on many occasions, Tesla has exceeded market expectations and its own guidance in terms of deliveries. However, this time, Tesla disappointed the market by achieving just the lower range of its delivery guidance. This added selling pressure to the company’s stock.

Series overview

In this series, we’ll take a look at the expectations surrounding Tesla’s upcoming earnings. These include expectations of revenue and margins. We’ll take a look at analysts’ recommendations and price targets. We’ll also discuss some key factors that may drive Tesla’s stock in 2016 and beyond.


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