In 2018, popular American electric carmaker Tesla (TSLA) showcased its ability to improve its car production exponentially. In the first half of 2018, reports suggesting bottlenecks in the company’s Model 3 production took a toll on investors’ (IWF) sentiments. However, the scenario changed in the second half as Tesla regained investors’ confidence by exceeding its Model 3 production rate guidance, which drove its stock up.
Last year, Tesla stock rose 6.9% compared to the 6.2% and 3.9% losses in the S&P 500 Index and the NASDAQ Composite Index, respectively. Other auto companies General Motors (GM) and Ford Motor Company (F) fell 18.4% and 38.1%, respectively, in 2018.
Tesla stock in the first quarter
While the broader markets seem to be on the path to a gradual recovery after a sharp sell-off in the fourth quarter, Tesla stock has turned negative. As of February 19, Tesla has fallen 8.2% quarter-to-date against the 10.9% gain in the S&P 500 benchmark.
In the third quarter of 2018, the company surprised its critics and many analysts by turning profitable. In the third quarter, Tesla’s adjusted EPS stood at $2.90 per share against Wall Street analysts’ consensus estimate of -$0.19. In the fourth quarter, the company’s adjusted EPS fell to $1.93 per share, worse than analysts’ consensus estimate of $2.20.
Rising competition in the electric vehicle market and Tesla’s struggle in the Chinese market (FXI) could be two of the key factors taking a toll on its stock in the first quarter. Read on to the next article, where we’ll talk more about Tesla’s struggle in the Chinese market.