Tesla Motors might be riding the glory of its super response from the pre-launch of its Model 3. However, an analyst has suggested that the “Tesla stock party” seems to be over and recommended the stock as good for “sale” at 28 percent less than the current price.
The analyst’s “sell” suggestion has surprised many, given the car maker’s achievement in bagging 325,000 pre-orders for its “Model 3” electric car starting with a modest $1,000 as a deposit before March ended.
Of late, Tesla stock had been witnessing an astounding 70 percent bull run from its 52-week low in February 2016, reports Profit Confidential.
Analyst Ronnie Moas of Standpoint Research was forthright while suggesting a downgrade of the electric car maker’s stock from “Hold” to “Sell” at a price he suggested at $180 from the reigning price of $250 per share.
The CNBC quoted the analyst, who said, although he likes Tesla and its CEO Elon Musk, his view is that Tesla stock has been unduly overvalued.
Moas stood firm in his advocacy to “sell “, which he stemmed from technical reasons of the stock than the core fundamentals of the car maker.
“I think the valuation of Tesla is completely disconnected from what my analysis is showing me. The market is treating Tesla as if it is an equivalent of a General Motors Company or Ford Motor Company. In fact, the revenue of GM and Ford is 20x times of what Tesla is,” Moas noted.
The analyst also doubted Elon Musk’s car company’s ability to fulfill the huge pre-orders.
“They had trouble meeting expectations of 16,000 units last quarter. If people tell me, they are going to go from 100,000 units to 500,000 units within four years, I would not bet money on that. I think there are a lot of places in the stock market to put your money other than Tesla.”
Meanwhile, latest reports said Tesla shares are slipping from the high it recorded on April 7 and the stock closed the session with a 3 percent loss from April 11 onwards.
The car maker’s stock has posted a huge 90 percent recovery from its February 2016 lows. However, in the current scenario of the stock’s unprecedented rise and a huge investor interest, many analysts are suggesting a “hold position” so that the trends ahead can be watched, reports The Street.