Tesla Shares Soared 10% on Thursday, with Market Value Approaching $ 120 billion

Netease Technology News on January 31, according to foreign media reports, Tesla released better-than-expected fourth quarter 2019 financial results on Wednesday in the United States local time, spurring the electric car maker’s stock price to soar. At the close of the fourth quarter, it rose 10.3% to close at US $ 64.81 per share, setting a new record high for the stock market, and its market value exceeded US $ 115.5 billion.

The following is a summary of Tesla’s 2019 fourth quarter results:
  • Tesla’s fourth-quarter 2019 revenue was $ 7.4 billion, an increase of 2% compared to $ 7.2 billion last year, and was higher than analysts’ average expectations of $ 7 billion;
  • Tesla’s net profit in the fourth quarter of 2019 was US $ 105 million, lower than the US $ 140 million in the same period last year;
  • Tesla’s earnings per share for the fourth quarter of 2019 were $ 0.56, adjusted to $ 2.14, which was higher than market expectations of $ 1.72, compared to $ 2 in the same period last year;
  • Tesla produced nearly 105,000 vehicles in the fourth quarter of 2019 and delivered about 112,000 vehicles with record production and delivery. Throughout 2019, Tesla delivered about 367,500 vehicles, a 50% increase over the previous year;
  • Tesla produced 17,933 Model S and Model X vehicles in the fourth quarter of 2019 and delivered 19450 vehicles; Model 3 produced 86,958 vehicles and delivered 92,550 vehicles;

On Thursday morning, several analysts raised Tesla’s target stock price. Among them, Canaccel Genuity analyst Jed Dorshemer raised his target share price from $ 515 to $ 750 and maintained a “buy” rating. He wrote: “It is vital that the company had $ 6.3 billion in cash at the end of the quarter and generated $ 1 billion in free cash flow during the quarter, which should ultimately eliminate any concerns about the balance sheet. “

Wade Bush Securities analyst Daniel Ives raised Tesla’s target share price from $ 500 to $ 710 and rated it “Neutral”. He wrote in the report: “Tesla reported fourth-quarter results that could change the rules of the game. Strong profitability and healthy cash flow herald a new era for Musk and Tesla. The stock price is still historically rising, but the bull market will continue as Chinese production and demand trajectories outside Shanghai look very strong. “

The surge in share prices meant that short sellers shorting Tesla stocks suffered heavy losses, losing more than $ 1.5 billion on Thursday. S3 pointed out that, in fact, after the Tesla short sellers lost $ 2.89 billion in 2019, their market-based losses so far this year have accumulated more than $ 5.2 billion. Since Tesla’s stock price fell to a low of $ 178.97 on June 3, 2019, short sellers have replenished 19.11 million shares worth $ 11.1 billion, with a market value of $ 12.43 billion.

Tesla said investors are relieved that positive cash flow and net profit are expected to continue in the future unless large-scale production investments are made.

Nonetheless, some analysts explained that, in terms of equity value, Tesla is still the shortest-selling stock in the US market. However, the stakes for shorting the automaker are falling. Tesla’s short-sold shares have fallen by 1.78 million shares in the past 30 days. Tesla shares have risen 164% in the past six months.

Although Tesla’s stock price has risen sharply since the announcement of its third quarter 2019 earnings, Wall Street analysts remain widely divided on its views. Of the analysts surveyed, 18 gave the stock a “sell” rating, twice the number of analysts who gave a “buy” rating

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