Can Tesla Inc. Rebound from Its Poor Forecast?

Where shares of the revolutionary tech company Tesla Inc. (NASDAQ: TSLA) are headed, nobody can be sure, however the recent drop of more than 20% in the company’s share price since its 52-week high has been cause for concern among some investors who see the electric vehicle (EV) maker’s share price as an extremely volatile option among other more established tech options available on the NASDAQ exchange.

This past week, shares of Tesla dropped after the company announced a reduction in the company’s forecast for its Model 3 and Model X production, concerning many investors bullish on the company’s ability to meet and exceed the company’s aggressive production targets. While Tesla was able to deliver its first Model 3 cars as planned earlier this past quarter, production issues and other highly-publicized hurdles have made forecasting revenues and earnings for the EV maker particularly difficult, especially considering the fact that the fourth quarter was initially expected by many to be one of the company’s strongest in some time.

The 10% reduction in Tesla’s forecast for production is a significant one, and has reignited concerns that the company’s ability to maintain its debt payments and continue operating without raising additional capital via debt or equity issuances in the coming quarters may be in question.

The attractiveness of Tesla’s stock at this time may be a reason for some investors to load up, however, I would recommend caution with Tesla stock at this point in time, given the lack of traction and the likelihood of additional investor dilution.

Invest wisely, my friends.