Perfect Timing For Tesla Motors Inc (TSLA)’s Revolution

Page 1 of 2

Tesla Motors Inc (TSLA)Isn’t it about time we switched from combustion engines to something far more efficient? If Tesla Motors Inc (NASDAQ:TSLA) performance is anything to go by, claims about how electric power is the future but not the present have been completely decimated. But will Tesla Motors Inc (NASDAQ:TSLA)’s hefty price tag and propriety ownership for its superchargers provide an opportunity for alternative fuels to supersede it? In this article, I aim to provide the best alternative fuel option for investors.

There are many ways to measure Tesla Motors Inc (NASDAQ:TSLA)’ remarkable progress in the three years since the electric car maker launched its initial public offering. There’s the first-ever profitable quarter this spring, the nearly perfect 99 out of 100 score in Consumer Reports’ review of the Model S sedan, and the stock price which is up by more than 500% since June 2010.

The Model S competes with well-established cars such as the BMW 5/7 Series and the Mercedes E/S class, while also competing with hybrid Toyota Motor Corporation (ADR) (NYSE:TM) Prius line and Ford Motor Company (NYSE:F)’s Focus Electric.

After the first quarter’s positive sales and profits, and pay off of $465 million government loan 9 years early, the company’s niche positioning and complete revamp of car design is expected to reap further good news for investors on July 22, when second quarter earnings are reported.

Toyota Motor Corporation (ADR) (NYSE:TM) Prius has been the most successful gas-electric hybrid to date. In July, it was reported to have crossed 3 million unit worldwide sales. In the U.S., the company expects to see its sales rise by approximately 6%. In the company’s latest annual report, it shows a positive free cash flow after clocking in a negative value in the previous year.

Toyota Motor Corporation (ADR) (NYSE:TM) is finally picking up its pace and getting closer to its previous level, as its margins and revenues improve. While it would be over-optimistic to expect Toyota to hold the same market share as it did before, the company’s impressive line-up and introduction of new models is allowing it to show phenomenal growth.

The latest big-manufacturer entrant into the electric car industry is the new Ford Motor Company (NYSE:F) Focus Electric which is not doing well at all. Problem being its high price, and while Ford Motor Company (NYSE:F) has cut its price by $4,000, sales continue to be disappointing as it has only sold 1,400 units since its 2011 launch.

Besides the electric vehicles, Ford is continuing to put in a strong shift in the North American market and cut down its losses in Europe until the continent recovers from financial crisis. What’s more worrying though, is its rival General Motors’ heavy involvement and rocketing sales in China. Keeping in mind how the company’s primary rival is the American counterpart, the F-150 sales in North America will keep Ford afloat for only so long.

Future course

The financial performance of the three companies is summarized in the table below. Tesla Motors Inc (NASDAQ:TSLA)’s lack of values stem from the fact that it made profit for the first time in the preceding quarter, and most of the metrics used are based on time-series data.

Indicator Tesla Toyota Ford
Price/Earnings TTM - 21.5 11.6
Operating Margin % TTM -32.9 6.0 4.5
Net Income Growth (3 Yr Avg.) - 66.2 27.8
Revenue Growth

(3 Yr Avg.)

54.6 5.2 4.9
Dividend Yield, % - 0.52 1.77
Return on Equity -183.0 8.5 34.4
Current Price $118.50 $130.00 $16.89

Data from Morningstar and Financial Visualizations on June 20th, 2013

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!