There is never a dull moment when it comes to Tesla Chief Executive Elon Musk. On one day, he's launching astronauts to the International Space Station. On another, he's opening a new auto manufacturing plant to a roaring crowd in Berlin. And on another, he's jousting with Twitter after becoming its largest shareholder. With all that, is Tesla stock a buy?
Tesla (TSLA), on April 2, reported that itdelivered 310,048 vehiclesin the first quarter, up 68% from the year-earlier period and just below analyst estimates of 312,000.
Analysts were bracing for a lower number as recent Covid effects in China had shuttered Tesla's Shanghai plant. That created "massive logistics complications delivering units to customers in Europe," Wedbush analyst Dan Ives said in a note to clients.
"Relative to other automakers such as GM(GM) and Ford Motor (F) as well as Chinese EV players such as Nio (Nio), Xpeng (XPEV) and others, we view these delivery and production numbers as a positive step in the right direction for the next step of the Tesla growth story to take hold with Berlin and Austin factories now green lighted," Ives wrote.
Covid Closes Shanghai Plant
Tesla Shanghai has been closed since March 28 due to a spike in Covid cases there.
Tesla's factory in Berlin opened on March 22 and is now shipping the Model Y. Its Austin plant opened on April 7, where it will also make the Model Y.
However, the war in Ukraine and persistent parts shortages will continue to make achieving delivery targets difficult.
"This was an 'exceptionally' difficult quarter due to supply chain interruptions " Musk said on Twitter.
The auto giant has signaled that it will conservatively sell 1.5 million new electric vehicles in 2022, or up to 2 million if supply issues ease. That would roughly triple last year's total.
As if all this wasn't enough activity, in early April, Musk revealed that hepurchased a 9.2% stake in Twitter (TWTR) for $2.89 billion, making him the company's largest shareholder, according to a securities filing.
Musk rejected an offer to take on seat on the company's board. However, Musk said he might engage with the social media company on a range of issues "without limitation."
In an SEC filing, Musk said he doesn't currently have any plans or intentions to change his holdings in the company, but it notes that he reserves the right to change his plans at any time, as he deems appropriate.
Berlin Auto Plant Deliveries
Tesla's new plant in Berlin is capable of producing up to 500,000 vehicles per year. It will eventually produce the bulk of Tesla's vehicles destined for European customers.
"This removes a major overhang on the stock over the past few months," Ives said. "The red tape and headaches seen around the delays/disputes opening up this flagship European factory have been frustrating for investors to watch unfold as many on the Street were doubting if Giga Berlin ever actually would open."
Tesla reported fourth-quarter earnings in January that topped estimates. Revenue jumped 65% to $17.7 billion, above estimates of $17.1 billion. It reported adjusted earnings of $2.54 a share, up 218% from the year-ago period and the fourth straight quarter of triple-digit gains. In addition, Tesla grew deliveries 87% to 936,172 vehicles in 2021. Tesla stock edged down on the report. It is expected to report first-quarter results on April 20.
Will Massive Expansion Bolster TSLA Stock
Tesla has undertaken amassive expansion of its manufacturing capabilities. Musk wants to eventually build 20 million electric vehicles a year over the next decade. That's more than double the current production of other automaking giants. So, it's now on a mission to rapidly expand its manufacturing capabilities.
Now that Tesla is making cars in Germany, it will go head-to-head in electric vehicles with three established German names: Volkswagen Group (VWAGY), BMW (BMWYY) and the Mercedes-Benz division of Daimler AG (DDAIF).
Other serious competitors include Rivian (RIVN), General Motors and Ford Motor, in addition to its China rivals. Ford's F-150 Lightning electric truck is expected this spring. The first GM electric Silverado, aimed at a limited number of fleet operators, is expected to hit the road in the second quarter of 2023.
In the stock market, timing is critical. So when you're looking for stocks to buy or sell, it's important to do the fundamental and technical analysis that identifies lower-risk entry points that also offer solid potential rewards.
Is Tesla Stock A Buy?
Tesla stock has formed a cup-with-handle base with a buy point of 1,152.97, according to analysis of a daily chart. Shares have taken a breather in recent days amid a market sell-off, after racing up 32% since mid-March. It ended regular session trading on April 11 at 975.93.
Its relative strength line has rebounded, a positive, but is still well off its peak.
Source: IBD
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