Case Study: What Credible analysts are saying on Tesla (TSLA) stock
Key Points
TSLA shares rose by 8.99% this week. They’re down by 20.95% during the last month. On a year-to-date basis, Tesla is now down by 60.58%. This compares poorly to the S&P 500, which is down by 18.29% during 2022 thus far.
Elon Musk continues to sell his Tesla shares, putting negative pressure on the stock, exacerbating the company’s 2022 sell-off.
Elon Musk sold another $3.6 billion of his personal TSLA shares this week. Musk continues to reduce his TSLA stake to fund expenses at his recently acquired company, Twitter. Tesla shareholders have expressed concern that Musk is not focused on operations and growth at Tesla.
90% of recent articles published by credible authors focused on TSLA shares offer a “Bearish” bias. 6 out of the 8 credible credible Wall Street analysts who cover Tesla believe shares are likely to rise in value. The average price target being applied to Tesla by these credible analysts is $318.95, which implies upside potential of approximately 102% relative to TSLA’s current share price of $157.78.
Harsh Chauhan, a Nobias 4-star rated author, said: “With Tesla now trading at 7.4 times sales, compared to its 2021 price-to-sales ratio of 25, savvy investors may want to capitalize on the stock's decline and buy it before it starts soaring.”
Howard Smith, a Nobias 4-star rated author, said, “Musk has now sold about $23 billion worth of his Tesla shares in 2022. Most, if not all, has been related to his purchase of Twitter. While that may not have anything directly to do with Tesla's underlying business, it adds to anxiety that Musk isn't focused on Tesla right now.”
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TSLA Dec 2022
Tesla (TSLA) shares recently hit 52-week lows. The stock has fallen below the $500 million market cap threshold, meaning that its famous CEO, Elon Musk, is no longer the world’s richest man. TSLA is down by 60.58% on a year-to-date basis. They’re down by 20.95% during the last month alone. And yet, the credible analyst community that the Nobias algorithm tracks sees triple digit upside potential.
Bullish Nobias credible authors:
Shanthi Rexaline, a Nobias 4-star rated author, covered Tesla’s recent fall to 52-week lows in a report published at Benzinga. She wrote, “The weakness comes on the back of CEO Elon Musk’s disclosures late on Wednesday regarding the sale of 22 million Tesla shares worth about $3.58 billion at an average purchase price of around $163.”
Howard Smith, a Nobias 4-star rated author, also covered the recent Musk stock sales in an article that he published at The Motley Fool. Smith highlighted Musk’s decision to sell and said, “Those sales came as the stock was trading near a two-year low, further concerning investors. Musk has now sold about $23 billion worth of his Tesla shares in 2022. Most, if not all, has been related to his purchase of Twitter. While that may not have anything directly to do with Tesla's underlying business, it adds to anxiety that Musk isn't focused on Tesla right now.”
Tradevestor, a Nobias 5-star rated author, wrote an article at Seeking Alpha this week titled, “Robbing Tesla To Pay Twitter” which claimed that Musk’s Tesla stock sales likely aren’t over. Tradevestor wrote, “The short- to medium-term problem is that Musk is still the largest shareholder and Twitter is nowhere close to being on its own without Musk. That means only one thing. Expect more sales in the future.”
An insider selling billions worth of shares creates a bearish vacuum that is difficult for bulls to fill in the near-term. And therefore, Tradevestor said, “My long-term conviction in Tesla stays, but the short- to medium-term sentiment is extremely negative.” However, they continued, “And therein lies the opportunity for the long term. Stocks tend to overshoot in both directions. I did add a little to my position yesterday, but it is going to be bumpy.” They stated, “Using the forward multiple of 37 and the expected growth rate of 48, we arrive at PEG ratio of 0.77, which suggests Tesla stock undervaluation.”
Ultimately, the author concluded their piece with a bullish take, stating: ‘"Buy when there is blood on the street" is an adage frequently used in the investing world. But blood is not something all of us are comfortable with. Some faint on seeing blood. I don't. Tesla's stock has seen nothing but blood in the past year and unfortunately, the man who made Tesla what it is today has quite a lot of blood in his hands. Love him or hate him, you cannot ignore him or count him out. It'd be foolish to write Tesla's eulogy when things look so bleak. That's when Musk is at his best.”
In her article, Rexaline noted statements made by Daniel Ives of Wedbush, a Nobias 5-star rated analyst, who also provided bullish commentary while touching upon Tesla’s near-term issues. Rexaline wrote, “Tesla bull, Wedbush’s Daniel Ives, called the stock sale as fueling the black cloud around the EV maker’s growth story.”
Theflyonthewall.com covered Ives’ analyst note, stating, “Wedbush analyst Daniel Ives says "the Twitter nightmare" continues as Musk uses Tesla as his own ATM machine to keep funding the red ink at Twitter which gets worse by the day as more advertisers flee the platform with controversy increasing driven by Musk.”
The coverage continued, “While Ives remains bullish on the long-term thesis for Tesla and believes the stock is oversold, Musk continues to throw gasoline in the burning fire around the Tesla story by selling more stock and creating Tesla brand deterioration through his actions on Twitter.”
However, because of his long-term growth outlook, Ives continues to look past the near-term headwinds that Tesla faces, maintaining an “Outperform” rating on TSLA shares with a price target of $250.00.
Ives isn’t alone in his bullish stance. Despite Tesla’s recent sell-off, Harsh Chauhan, a Nobias 4-star rated author, included it in his list of “3 No-Brainer Growth Stocks to Buy Right Now” that he discussed in an article published this week at The Motley Fool.
Before getting into his bullish thesis, Chauhan mentioned the potential Musk/Twitter distraction, as well as near-term issues in the electronic vehicle space as potential growth headwinds for the stock. He said, “Reports suggest that Tesla may be cutting production in China thanks to weak demand. The company missed revenue expectations in the third quarter of 2022, and there were concerns that surging inflation and global economic weakness are negatively impacting its vehicle deliveries.” “However,” he continued, “investors should focus on the bigger picture, as Tesla is operating in a market that's built for long-term growth.”
Chauhan said, “Fortune Business Insights estimates that global EV sales could grow at an annual pace of 24% through 2028 and hit $1.3 trillion in annual revenue.” He also touched upon the company’s recent fundamentals, stating, “The company's total revenue shot up 56% year over year in the third quarter to $21.5 billion. Consensus estimates suggest that Tesla could finish 2022 with $83 billion in revenue, an increase of 55% over the prior year.”
“More importantly,” Chauhan noted, “Tesla is anticipated to sustain its remarkable revenue growth.” He concluded his piece by saying, “With Tesla now trading at 7.4 times sales, compared to its 2021 price-to-sales ratio of 25, savvy investors may want to capitalize on the stock's decline and buy it before it starts soaring.”
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.
Overall, there is a large sentiment gap between the credible author and credible analyst communities that the Nobias algorithm tracks when it comes to Tesla shares. 90% of recent articles penned by credible authors focused on Tesla stock have included a “Bearish” bias. Yet, 6 out of the 8 credible Wall Street analysts that Nobias tracks believe that TSLA shares are likely to increase in value from their current $157.78 level.
The average price target being applied to TSLA shares by credible analysts is $318.95. Relative to the stock’s current share price, that represents upside potential of approximately 102%. Therefore, TSLA remains one of the most polarizing stocks in the entire market.
Overall bias of Nobias Credible Analysts and Bloggers:
Overall, 54% of recent articles published by credible authors which focused on COST shares expressed a “Neutral” bias. But, the credible Wall Street analysts that Nobias tracks are more bullish. 6 out of the 8 credible analysts that Nobias follows who have expressed an opinion on COST shares believe that they’re headed higher. The average price target being applied to COST shares by these credible individuals is $548.63, which implies upside potential of approximately 13.5% relative to Costco’s current share price of $483.02.
Disclosure: Nicholas Ward has no TSLA position. 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.
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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.