What Nobias says about Tesla (TSLA) stock
Summary
Tesla shares have fallen by nearly 30% during the last month, largely due to fears associated with Elon Musk being forced to sell shares to pay for his Twitter acquisition.
Tesla announced its first semi-truck sale, representing a large growth opportunity for the company as it enters into another vehicle market.
Credible authors are largely bearish on TSLA shares; however, credible analysts see upside potential of approximately 47%.
Last week Nobias published a report highlighting news that a deal between Elon Musk and Twitter was likely to close, with the billionaire reportedly agreeing to purchase Twitter for the originally $54.20/share agreed upon price. This news was great news for Twitter shareholders; shares of that company are now up by approximately 19.6% during the last month. However, a negative reverberation of this news has been a sell-off in Tesla (TSLA) shares. TSLA is down by approximately 6.7% during the last week, pushing the stock’s losses during the last month down to -28.7%.
TSLA Oct 2022
Bearish Nobias credible authors:
In a recent report, Puja Tayal, a Nobias 5-star rated author, highlighted why the Twitter deal is bad news for Tesla shareholders. She wrote, “Now comes the twist. Faced with deposition and trial, Musk informed Twitter and the court that he is willing to complete the Twitter deal at the agreed-upon price. But he needs time to accumulate the funds. The judge gave Musk until October 28 to complete the deal and delayed the trial from October 17 to November.”
Tayal continued, “Musk’s wealth is in his Tesla shares. He asked for more time as he cannot sell his shares before October 19, when Tesla reports its third-quarter earnings. And he can’t back out from the deal this time because it would immediately be followed by a lawsuit.” “So,” she said, “Musk has eight days (October 19 -28) to pay Twitter US$44 billion. With Tesla shares near their 52-week low, you can expect a lot of offloading by Musk after the earnings. Moreover, preliminary data suggests that Tesla’s earnings might not be pleasing to shareholders as its third-quarter vehicle deliveries (343,000) fell short of analysts’ expectations (364,660).”
Tayal believes that this selling pressure is likely to result in even more downside for Tesla shares and therefore, she concludes, “Instead of buying the stock today, wait till the end of the month to get a better deal.”
Bullish Nobias credible authors:
Amy Legate-Wolfe, a Nobias 5-star rated author, recently published an article at Yahoo Finance which highlighted the bullish secular trend that she sees playing out for Tesla as consumers switch from ICE (internal combustion engines) to EVs (electronic vehicles). She wrote, “Switching over to electric vehicles (EVs) is something more Americans are also considering these days. New registrations of of electric vehicles jumped 60% in the first quarter of 2022 and Teslas made up over half of new EV registrations.”
Legate-Wolfe continued, “There are currently a total of about 1.7 million EVs on the road in the U.S compared to around 400,000 in Q2 of 2018., and that number is expected to keep growing.” And, after analyzing insurance, maintenance, and depreciation data regarding EV’s (and Tesla models in particular), she concluded, “Consumers should certainly consider EVs as the world shifts away from gas models. And right now looks like a great time.”
Howard Smith, a Nobias 4-star rated author, recently published an article highlighting another potential catalyst for Tesla’s long-term growth: semi-trucks. Smith wrote, “Tesla CEO Elon Musk made a big announcement last night, and it wasn't about his bid to buy Twitter .” Smith continued stating, “Musk went on Twitter last night to announce Tesla's first Semi truck delivery is expected to go to PepsiCo on Dec. 1.”
Like Tayal, Smith mentioned Musk selling pressure is serving as a near-term headwind for share price appreciation; however, he took a long-term view and remained bullish on the prospects of a more diversified revenue stream for Tesla moving forward. Smith wrote, “Investors have been looking forward to Tesla diversifying its product offering with both the battery electric Semi truck and the Cybertruck. That electric pickup truck is scheduled to begin shipping next year.”
Nicholas Ward is a Senior Investment Analyst at Wide Moat Research. He has spent the last 8 years writing about the stock market at various publications, including Seeking Alpha, The Street, Forbes Real Estate Investor, Sure Dividend, The Dividend Kings, iREIT, Safe High Yield, and The Intelligent Dividend Investor.
Regarding the performance metrics of Tesla’s semi-truck, Smith said that it “will be able to travel 500 miles on a single charge.” He continued, “That compares favorably to the 330 mile range from rival Nikola 's Tre BEV (battery electric vehicle). Nikola expects to have a longer-range option with its upcoming hydrogen-powered fuel cell electric truck. But there could be plenty of demand for electric heavy trucks needed for shorter, local hauls.”
Ultimately, Smith stated, “The Semi truck won't noticeably impact Tesla's bottom line anytime soon, especially with the company expected to sell approximately 1.4 million electric cars and SUVs this year.” “But,” he said, “it's the first step in getting meaningful revenue from a more diversified product mix.”
Overall bias of Analyst and Blogger community:
Right now, there’s a big disconnect between the credible author community and the credible Wall Street analysts that Nobias tracks when it comes to Tesla shares. 90% of recent articles written on the company have expressed a “Bearish” bias, showing that credible authors agree with the stock’s recent negative trajectory. However, when looking at the opinions expressed by credible analysts, we see that 6 out of 8 believe that Tesla shares are going to rise in value. The average price target being placed of TSLA shares by credible analysts is $318.95. TSLA is priced at $205. Therefore, the credible analyst average target implies upside potential of approximately 48%.
Disclosure: Nicholas Ward has no TSLA positions. Nicholas Ward wrote this article for Nobias at their request with the intention of giving investors a balanced perspective based on the writings of Nobias highly rated analysts and bloggers. Nobias has no business relationship with any company whose stock is mentioned in this article and does not have a position in this stock.
Additional disclosure: All content is published and provided as an information source for investors capable of making their own investment decisions. None of the information offered should be construed to be advice or a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. The information offered is impersonal and not tailored to the investment needs of any specific person.
Disclaimer: The Nobias star rating is based on past performance results and is not an indicator of future results. These past performance returns do not represent returns that any investor actually earned. Assumptions made include the ability to purchase the stocks recommended by the author under liquid markets where the transaction would be at the market price for the day. In reality, loss in liquidity may have a material impact on the returns that actually may have been earned. Further, returns are calculated without any including transaction costs, management fees, performance fees or expenses, or reinvestment of dividends and other income. This information is provided for illustrative purposes only.