Strong Demand?
In yesterday’s press release, Tesla Motors Inc (NASDAQ:TSLA) had said that “Vehicle demand in Q4 was particularly strong. Q4 net orders for Model S and X, which were an all-time record for us, were 52% higher than Q4 2015 and 24% higher than our previous record quarter in Q3 2016 “. But many are questioning Tesla’s assertion regarding strong demand given the promotion and discounts. Tesla has announced that it will delay the scheduled 5% price hike (3) in the UK by two weeks due to “strong demand”. Tesla is also extending the unlimited supercharging offer by two weeks.
In November, Tesla had announced that it will end the current benefit of lifetime unlimited access to Tesla’s Superchargers network by the year end. However, it recently extended the offer, with slight modification, by a couple of weeks. Tesla was found using promotions and deep discounting even during Q3. Also, the Q4 sales of Model S were lower than the previous quarter as well as Q4 2015. Many analysts consider this to be an indicator of slowing demand. (Also read: Solar Roof Over-hyped, Tesla Motors Inc Needs Volume).
Watch Out For The Gigafactory Tour
Given all the risks surrounding it, it is not surprising that Tesla is a heavily shorted stock. In the latest reporting period, the short interest came in at a massive 26% with days to cover around 9 days. While the huge short interest indicates the strong bearish sentiment around the stock, it could also lead to a short squeeze on any positive news. It is possible that a short squeeze could already have contributed to a 10% rise in Tesla’s stock price since December 15th. On the technicals front, RSI indicates that Tesla stock is overbought, signaling a near-term correction. Tesla stock is hovering around its 200-day SMA.
But today’s price action is likely to be dictated by analysts commentary after the Gigafactory tour. Tesla Motors Inc (NASDAQ:TSLA) is scheduled to take analysts around its Gigafactory tour today to show them the progress made. Gigafactory is one of the centerpieces of the Tesla story. Goldman Sachs analyst David Tamberrino expects the tour to be a positive catalyst for the stock. But if the coverage is not good from the tour then expect the stock to go down. In the long run, Tesla stock continues to remain a risky bet.
The article Tesla Motors Inc Misses On Deliveries Again, Time To Sell TSLA Stock? originally appeared on amigobulls.com. Watch our analysis video on TSLA
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Additional Links:
(1) https://electrek.co/2016/12/09/tesla-model-3-adam-jonas-morgan-stanley/
(2) https://electrek.co/2016/12/29/tesla-model-3-speed-up-production-kgi-analyst/
