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Tesla shares (TSLA) have lost more than a quarter of their value since the beginning of the year. The decline represents a significant underperformance compared to broader markets. The S & P 500 (SPY) and the Dow Jones Industrial Average (DIA) rose 20.0% and 16.2%, respectively.
Why did Tesla action underperform?
The major deceleration of the stock started after the second quarter results. The company recorded larger than expected losses for the quarter. Tesla also announced the departure of CTO JB Straubel. Investors are also worried about the demand for electric vehicles and the profitability of the company.
JMP Securities analyst is positive on Tesla stock
Despite these concerns, some analysts are positive about society. After the sale of the shares, some analysts think it is undervalued. According to Tipranks, Joseph Osha, an analyst at JMP Securities, said: "Tesla's competitive position in the electric vehicle market [his] Positive position on the stock. "He said the" weak "competitors launch products make it" even more confident that Tesla can maintain its leading position. "
Tesla ahead of his peers
Tesla's vehicles, especially its model 3, attracted crowds. Model 3 is the best-selling model among electric vehicles in the United States and Europe. According to InsideEVs, during the first seven months of the year, Model 3 has been sold to over 80,000 units in the United States. Notably, the two biggest competitors of the Model 3, the Toyota Prius and the Tesla Model X, have just beaten 10,000 points, according to Inside EV. In Europe, the Tesla Model 3 was the best-selling EV model from January to July, according to a report from InsideEV. The Model 3 was the third best-selling car in the UK in August, just two months after its launch.
"Tesla-killers" did not live up to its name
While each new EV launch was perceived as a potential "Tesla killer", none of them had kept its promises. Recently, Porsche launched its 100% electric Taycan, which could have challenged the Tesla S model. However, Taycan's price is higher, while the range is lower than its counterpart Tesla. General Motors (GM) launched the Chevrolet Bolt. Despite the lower price of Bolt and the advantage of his first player, this did not deter much hype for Tesla. Audi and Jaguar have also launched models for Tesla cars, but their sales have been disappointing.
Osha is concerned about Tesla's leadership
Osha is optimistic about Tesla's leading position in the field of electric vehicles. However, he is concerned about Tesla's leadership. According to Tipranks, Osho said it was "difficult to understand how Elk Musk's refusal to form a stable leadership team can be rationalized as typical or acceptable behavior of the Silicon Valley founder." criticisms of the leadership style of CEO Elon Musk. Several Tesla bears and bulls have also highlighted the problem.
High turnover rate of executives
The highest turnover rate for Tesla executives is for investors. Earlier this year, Musk announced the departure of Tesla's former chief financial officer, Deepak Ahuja, resulting in a massive sale. A Bloomberg report, quoting an analyst from Bernstein, said Tesla's turnover rate is higher than that of other technology companies.
In fact, James Anderson of Baillie Gifford, Tesla's largest shareholder after Musk, spoke with Barron's. He added, "We would not be opposed to a different role." He also added, "I do not think he needs to be CEO." To learn more, read Why Elon Musk? He does not need to be the CEO of Tesla.
Rating and target price of analysts
Osha has a target price of $ 337 on Tesla shares, which implies a 36% increase over the closing market price on Wednesday. Analysts covering the stock are deeply divided on society. According to Thomson Reuters, 32 analysts cover the Tesla stock. Among the analysts, 31% recommend a "purchase", while 41% recommend a "sale". The average target price is $ 253. However, target prices range from $ 140 to $ 400.
Macquarie analyst is optimistic about Tesla's stock
Macquarie analyst, Maynard Um, has a similar thesis on Tesla. As reported by Teslarati, quoting a report from Street Insider, Um reiterated his "outperformance" rating on Tesla. It has a target price of $ 400, which suggests a potential upside of about 62%. Um also remains optimistic about the title, given her lead over her competitors. He cited Tesla's leading position on Porsche, "especially in terms of software and pricing," Teslarati reported.
Analysis of bear arguments
There is no shortage of detractors for Tesla. Rajvindra Gill, analyst at Needham & Company, stays in the bear camp for Tesla. As stated by Yahoo Finance, he said: "We believe that the automaker will continue to take steps to increase its deliveries at the expense of its bottom line."
Catalysts to come
Tesla will have to be consistent in its deliveries and execute new models in time to close its doors. The next model Y could solve the company's margin problems. We will have to see how the adoption of this model will unfold. Investors are eagerly awaiting any new version of the company.
Musk recently suggested that the company could unveil its first electric van in November. Could reading Tesla dominate the electric van market? to learn more. The launch of its Chinese Gigafactory plant, expected to be in production by the end of the year, could be another important catalyst for the Tesla stock. Read China Tesla's Gigafactory could it be its secret weapon? to learn more.
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