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Here's Why Tesla (TSLA) Stock Climbed Again on Monday

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Shares of Tesla (TSLA - Free Report) popped 3.53% on Monday to close at $370.83, inching slowly closer to their 52-week high. After a series of positive developments, spread out over the last few weeks, Tesla’s stock price has gone on a sustained run that has many investors thinking the electric car company might be back on track. So let’s take a look at the most recent Tesla news and give investors a quick preview of what’s to come.

Model 3

Tesla’s Model 3 sedan could propel the company to the next level and help it compete directly against the likes of General Motors (GM - Free Report) , Volkswagen (VLKAY - Free Report) , Ford (F - Free Report) , Toyota (TM - Free Report) , and other more established automakers in the electric vehicle market. The mass-market electric car sports a price tag of $35,000, by far Tesla’s lowest priced EV. However, Model 3 production has become a major issue for Tesla over the last year, which contributed directly to many of Tesla’s 2017/18 setbacks.

With that said, CEO Elon Musk recently proclaimed that it is “extremely likely” that Tesla will hit its weekly Model 3 production goal of 5,000 by the end of June. More recently, the CEO tweeted out Model 3 production updates over the weekend that highlighted Tesla’s new tent-like production structure, which was built to boost Model 3 production.

 

The tweet comes after the outspoken CEO sent an email to Tesla staff Friday night in which he congratulated them on their Model 3 progress, while also noting that “radical improvements” need to be made in order to hit the company's targets.

Investors should also note that Musk purchased roughly 72,000 Tesla shares last week, worth almost $25 million. This move helped signal further confidence in Tesla, while Musk also told short sellers they “have about three weeks before their short position explodes” (also read: The "Short Burn of the Century" Seems to be Taking Shape in Tesla).

Layoffs

Last week, Tesla said that it will lay off about 3,500 workers amid its push to meet its Model 3 production goals. The job cuts are aimed at streamlining the company. “As part of this effort, and the need to reduce costs and become profitable, we have made the difficult decision to let go of approximately 9% of our colleagues across the company," Musk wrote. “These cuts were almost entirely made from our salaried population and no production associates were included, so this will not affect our ability to reach Model 3 production targets in the coming months."

Price Movement

Shares of Tesla were still down roughly 0.5% over the last year, before Monday’s climb. Tesla’s decline was largely due to Model 3 production woes and mounting debt concerns. With that said, investor confidence has slowly returned.

 

Year to date Tesla has seen its stock price surge roughly 20%. Over the last month, investors will note that TSLA has performed insanely well, on the back of newfound positivity that Tesla will finally be able to churn out Model 3 sedans, while focusing on profitability.

Outlook

Our current Zacks Consensus Estimates are calling for Tesla’s Q2 revenues to soar by nearly 45% to hit $4.04 billion. Looking ahead to the full-year, Tesla’s revenues are expected to reach $19.07 billion, which would mark a 62% climb from fiscal 2017.

Tesla is currently a Zacks Rank #2 (Buy) that investors should pay close attention to because if the company finally reaches its Model 3 production goals it could help push its stock price even higher.   

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