Tesla's new vehicles didn't send the stock soaring -- and that could signal a new reality for the company

TeslaTesla CEO Elon Musk, with some new toys.

  • Tesla had threatened $US400 a share earlier in 2017, but recently the stock has traded closer to $US300.
  • The Semi Truck and new Roadster unveiling haven’t restored investor enthusiasm.
  • Tesla’s major upcoming news will be full-year and Q4 earnings, as well as total vehicle deliveries for 2017.

Last week, Tesla CEO Elon Musk unveiled the company’s Semi Truck and new Roadster in spectacular fashion in Los Angeles.

Wall Street wasn’t impressed by the show. After heading toward $US400 per share earlier this year, Tesla’s stock price has slipped back considerably. In the past month, it’s down almost 10%, and as of late it has settled into a narrow trading range between $US300 and $US320.

What we’re seeing here is a waiting game. Tesla is now out of major news events for the remainder of 2017, so investors will be eyeing two future reports: total deliveries for the year, which should set a record at around 100,000 vehicles; and fourth-quarter and full-year earnings, showing Tesla losing an epic amount of money.

Good news and bad news, in other words. But there’s a wildcard:the Model 3. Tesla was supposed to build 20,000 a month by December. That pace has been pushed into 2018. And don’t forget that Tesla has something like 500,000 pre-orders for the car, whose base price is $US35,000. Those orders need to be fulfilled if Tesla wants to collect the revenue.

Trading on the Model 3

For the rest of 2017 and into early 2018, Tesla’s stock will trade on Model 3 developments. Investors are getting a break now during this levelling-off period, but obviously weak Model 3 deliveries for the fourth quarter and another big loss could send shares spiraling down below $US300.

They would have to fall pretty far to vindicate some of the more bullish sentiment, however. That would require a plunge below $US200.

For what it’s worth, Tesla bull Adam Jonas, the lead auto analyst at Morgan Stanley, says the opposite. In a research note published Tuesday, he reiterate his $US379 price target and wrote that “we anticipate Tesla’s stock price may reach highs in the range of $US400 or more over the next few months before facing some more serious headwinds later in the year that could take the stock significantly below current levels.”

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