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Strong start of Tesla Inc in 2015

Tesla Inc (NASDAQ: TSLA) – A sharp increase of sales has been announced by Tesla as it sold 10,030 cars in first quarter of March with the growth rate of 55% in comparison to last year.

In this year Tesla has guided to 70% plus unit growth which would be at least 55,000 Model S’ and Model X’s so at least the company is off to a strong start.

The Trip Chowdhry expects that Tesla’s first quarter revenue could come in at $1.15 billion vs. the Street’s $1.02 billion due to 5% more units being sold and higher ASPs (average selling prices) from the dual motor P85D models. It will be interesting to see if this impacts Morgan Stanley’s estimates since they were cut on February 20th and CSLA’s downgrade to underperform with a price target of $220, which is above the current share price.

Tesla plans to announce its quarterly sales within three days of quarters end to negate the speculation that surrounds the company’s results. While it could be helpful for Tesla to move to monthly result publications it would not surprise me that due to its much lower production volumes than other car manufacturers its monthly production is too variable and too much would be read into the numbers by short-term traders.

For Reaching the target, Tesla’s billionaire founder needs a flawless debut of a new model—the Model X sport utility vehicles—in the second half of the year. To date, Mr. Musk has struggled to hit projections and launch vehicles that meet initial timing or pricing expectations, so the Model X’s launch poses a test of Tesla’s ability to make the leap from niche to mainstream.

The Tesla typically waits until well after a quarter ends to disclose sales results, bucking an industry trend of reporting sales on a monthly basis. Tesla’s cloistered approach has led to a wild variance in estimates of the company’s sales and profits. It will now report quarterly sales within three days of a quarter ending in an effort to avoid confusion.

Still, there is more to the Tesla story than quarterly sales.

The auto maker has used attractive lease deals to sustain demand in the U.S. amid low gas prices that are souring the outlook for other electric cars, but has struggled to expand to some new markets. In a rare retreat, Tesla outlined plans to cut jobs in China following its $108 million fourth-quarter loss and an inability to meet expectations in the world’s largest light-vehicle market.

After hitting a closing high of $286.04 on September 4 Tesla’s shares have seen a series of lower highs and lower lows. At its Thursday close of $191.00 it is essentially back to where it was on February 10, 2014.

As it has trended down its 50 day moving average (the blue line in the chart below) has been a resistance level to the shares. It may take a sustained move above the current $201.78 level for technical investors to become interested in the stock as it will need to break the lower high pattern it has been in for the past seven months and start back on the trend to get to Elon Musk’s pronouncement that Tesla could be worth as much as Apple.

About Tony D. Booth

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