[video] Tesla (TSLA) Rises After VP Delivers Detroit Auto Show Remarks

Tickers in this article: TSLA
Update (4:16 p.m. EST): Updated with closing price, day high and low prices, price change and volume information, as well as more remarks from Jerome Guillen.

NEW YORK (TheStreet) -- Tesla Motors Inc.  rose 15.68% to $161.19, up $21.85 from its previous close of $139.34, on Tuesday after the company announced better-than-expected vehicle delivery in its fourth quarter and also announced plans to double its sales and services locations (of which the company already has 150) and add 80 new supercharger stations worldwide in 2014.

The stock had a volume of 25,912,275, far above its average of 10,897,900. It had a high of $162 and a low of $136.67 for the day.

Tesla Vice President Jerome Guillen delivered remarks at the Detroit Auto Show on Tuesday and announced that the Palo Alto-based auto maker had delivered 6,900 vehicles in the fourth quarter, which exceeded the company's previous guidance of slightly less than 6,000 for the quarter. The stock climbed to $149.75 shortly before noon.

But just minutes later, news broke that the company would recall up to 29,000 Model S vehicles because of issues with the wall charger power adapter, which some customers had said caused overheating in their garages, and the stock lost some momentum and dropped below $144. Tesla CEO Elon Musk then took to Twitter to clarify that "no Tesla vehicles are being physically recalled by Tesla" and that "there was an over-the-air software update (done last month) and an upgraded US 14-50 adapter will be mailed to customers."

He ended with "the word 'recall' needs to be recalled."

Guillen also clarified that the software update should fix problems for 99% of customers.

Tesla recently announced that it would upgrade its wall chargers, which would include an automatic shut-off in case of overheating. 

TheStreet Ratings team rates Tesla as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate TESLA MOTORS INC (TSLA) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio of 1.20 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, TSLA maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for TESLA MOTORS INC is currently lower than what is desirable, coming in at 30.44%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, TSLA's net profit margin of -8.92% significantly underperformed when compared to the industry average.
  • Compared to other companies in the Automobiles industry and the overall market, TESLA MOTORS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • TESLA MOTORS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TESLA MOTORS INC reported poor results of -$3.70 versus -$2.52 in the prior year. This year, the market expects an improvement in earnings ($0.57 versus -$3.70).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 65.3% when compared to the same quarter one year prior, rising from -$110.81 million to -$38.50 million.
  • You can view the full analysis from the report here: TSLA Ratings Report