To say that Tesla Motors Inc. (NASDAQ: TSLA) failed to generate more enthusiasm for the stock after its fourth-quarter earnings report would be incorrect, unless you measure to the end of the week. Shares jumped about 5.8% Thursday morning to open at $152.00, but closed Friday nearly a dollar lower than that. Shares had been sliding well before Tesla reported results, however.
It could be that Tesla is the poster child for a momentum stock: plenty of promise, decent actual performance and sky-high multiples. The big question of course is what is real and what is not. On Monday, Liam Denning at Bloomberg had this to say about Tesla after Morgan Stanley’s analyst cut his price target on Tesla by a third:
If you want a good definition of froth, a price target jumping by two-thirds largely due to expectations around businesses that either barely exist or don’t at all, and then being cut by almost 30 percent all in the space of less than six months is a pretty good candidate. Even now, a quarter of Morgan Stanley’s new target for Tesla relates to upside in the storage business and launching a successful robo-vehicle venture.
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