Tesla Motors (TSLA) Breaks Out After Beating Estimates, Landing New Mercedes Deal

It’s been a great morning for shares of Tesla Motors (TSLA) after the company reported another large quarterly loss of $65 million (well above the year ago loss of $35 million), but beat analyst estimates on both the top and bottom line.  The company reported an EPS loss of .55/share (vs the estimate for .60/share loss) on revenues of $57.7 million vs the analyst estimate of $46.4 million.

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While the company continues to pile up losses, there is much to get excited about.  The company has completely sold out of its Model S for 2012 which could bode well for 2013 when the company ramps up production.  However, it remains to be seen whether this car can get beyond the early adopter/novelty crowd and reach into the mainstream.  If they can do that, you can bet this stock is going to go much much higher.  Elon Musk has said he expects the company to turn its first profit in 2013.

Outside of selling their own cars, they do have the added bonus of being able to sell batteries and other parts to other auto makers, namely Toyota and Daimler.  In fact Elon Musk said in the conference call he has a letter of intent from Daimler for another deal to provide a full drive train for a new Mercedes electric car.  Details will be announced at the end of the year.  In a Bloomberg article, industry consultant Alan Baum had this to say: “Even though they’re losing money, the fact that their batteries are attractive to other automakers gives them some revenue and some credibility.  They are catching a few breaks in the sense that people want to do business with them.”

Adding to the optimism, the company is raising 2011 revenue estimates to $195 – $200 from the previous expectation of $180 – $190 and announced it’s adding three more retails stores in Bellevue, WA, Chicago and Newport Beach, CA.

Technically, shares have broken out of a long one year double bottom base today.  That typically means that the stock has a very good chance of testing all time highs around $36 within a few weeks to a couple months.  “If” it can clear all time highs and hold, the sky is the limit for shares of Tesla.

If you’re a Tesla shareholder or plan on becoming one, you might take a look at the earnings call transcript provided by Seeking Alpha.

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