Tesla (TSLA) stock has been on a roller-coaster ride in 2019. However, the company has completed significant milestones, not only in terms of product launches and growth activities but also in terms of financial recovery. So far, this year has been transformational for the company.
The change is also reflected in Tesla stock’s journey. Although the stock fell in the first half of the year, it has recovered in the second half. Tesla’s stock price, which started the year at $332.8, fell to $178.9 in June. Now, the stock has recovered to $333.0. So, Tesla’s stock returns have stayed flat this year.
Stock under pressure in the first half
In the first half of the year, Tesla was going through restructuring changes. The company shut several stores and shifted to online sales. The company wanted to eliminate redundant costs to create a leaner structure.
Tesla reported losses in the first half of the year. The company saw lower deliveries in the first quarter and a recovery in the second quarter. In the first quarter, the company’s Model 3 deliveries fell to 50,928 units. The deliveries rose to 77,634 units in the second quarter. Tesla posted non-GAAP losses of $494 million in the first quarter and $198 million in the second quarter. Fluctuating deliveries and quarterly losses weighed on Tesla stock.
Positive news supported Tesla’s stock price
Some positive news supported Tesla’s stock price in the first half of the year. Tesla was in the process of setting up Gigafactory 3 in China. The factory was a stepping stone in the company’s growth journey. To learn more, read Tesla’s China Ramp-Up Not Expected before Mid-2020.
Tesla CEO Elon Musk announced that the company could launch a fleet of robotaxis as early as next year. To learn more, read Robotaxis: Voyage versus Ford, Waymo, and Tesla.
Tesla stock recovered in the second half
In the second half, Tesla stock got a boost mainly after its third-quarter earnings. In line with the previous two quarters, Wall Street analysts expected the company to post a loss. However, Tesla surprised investors and analysts by posting a non-GAAP profit of $342 million.
Tesla’s Model 3 deliveries rose to 79,703 units. The company’s total deliveries touched record highs of 97,186 units. Profits and higher deliveries boosted the stock. Tesla stock rose nearly 20% due to its earnings release. Analysts also raised their target prices on the stock. To learn more, read Tesla Stock: J.P. Morgan, RBC Raise Price Targets.
The Gigafactory 3 update boosted the stock. The factory was built in record time and at a lower cost than its US counterpart. The company started production at the site and should start deliveries soon. Chinese Model 3 could start the growth phase for the company.
Gigafactory 4 plans boosted the stock
The news about Gigafactory 4 supported the rally in Tesla stock. The company plans to build a factory in Germany. Notably, the factory is slated to produce Model Y for the company. Tesla plans to create local manufacturing footprints across the globe as part of its expansion plans. To learn more, read Tesla Goes Big on the Model Y with Another Factory.
Cybertruck bought in some volatility
Tesla also revealed its Cybertruck. Although the truck wasn’t perceived well by Wall Street earlier, analysts seem to be supporting it. Several analysts criticized the electric truck’s launch. To learn more, read Tesla Stock Slumps 5% after Cybertruck Reveal.
However, Piper Jaffray raised its target price on the stock, which supported the Cybertruck. To learn more, read Why Tesla Is a ‘Must-Own’ as per Piper Jaffray.
Roller coaster ride continues
Phew! What a journey! From losses to profits and from uncertainty to must-own, Tesla stock has come a long way this year. Now, the company has laid the foundation for next year’s growth.
Tesla is looking at several growth drivers for 2020 including the production of Model 3 from Gigafactory 3 and Model Y from Fremont. Overall, 2019 has been a transformational year in Tesla’s journey. As a result, 2020 could be a growth year.