Is Tesla Motors Stock a Buy Now?

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With shares of Tesla Motors (NASDAQ:TSLA) trading around $197, is TSLA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Tesla Motors designs, develops, manufactures, and sells electric vehicles and electric vehicle powertrain components. The company also provides services for the development of electric powertrain systems and components, and sells electric powertrain components to other automotive manufacturers. It markets and sells its vehicles through Tesla stores as well as over the Internet. Consumers and companies are looking to save at the pump, and what better way to do so than with electric vehicles?

Tesla Motor wants its Model S to qualify for China’s electric car subsidies that the government said will remain more valuable than initially planned. Yesterday, Ben Kallo of Robert W. Baird & Co. and Craig Irwin at Wedbush Securities Inc. said China’s extension of incentives, which Tesla’s car doesn’t get as a U.S. import, nevertheless creates favorable conditions ahead of the start of Model S sales next month.

“We understand we don’t qualify for direct subsidies,” Diarmuid O’Connell, Tesla’s vice president of business development, said in a phone interview yesterday. “We’re hoping the government will consider the role Tesla can have in catalyzing electric vehicle adoption in China and extend those incentives to Model S as well.” Tesla, which quadrupled in value last year, began rising again last month after the Palo Alto, California-based company said its shipments of Model S sedans in the fourth quarter of 2013 and revenue were 20 percent higher than it had expected.

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