TSLA Stock Poised for More Gains?
The year 2016 might be a game-changer for Tesla Motors Inc (NASDAQ:TSLA) stock. At least, one new report indicates so.
Recall that three years ago, Tesla CEO Elon Musk made a wacky prediction. He said that the future of all transportation will be electric. At that time, that prediction sounded absurd because electric vehicles (EVs) had failed to find traction in the broader consumer market.
Within three years, however, Tesla has completely changed the industry dynamics for EVs.
Today, more automakers are showing interest in the technology than ever before. At the Consumer Electronics Show (CES) this year, EVs were the top attraction. In fact, General Motors’ “Chevy Bolt,” showcased at CES 2016 and designed for the average consumer, is touted to drive strong EV demand from the mainstream.
But Tesla is already prepared for competition. Tesla’s “Model 3”—which directly competes with the Chevy Bolt in pricing—is set to be introduced to the world later this month.
In fact, Tesla might be gaining ground faster than its competitors. The monthly EV sales report from Inside EVs reveals that Tesla is now beating traditional automakers by becoming a leader in the EV industry. So far, Tesla’s “Model S” is the top sold EV model in 2016. (Source: “Monthly Plug-In Sales Scorecard,” Inside EVs, March 2016.)
The report also hints that Elon Musk’s prediction might come true sooner, rather than later. Only two months into 2016, the EV industry is already proving naysayers wrong. EV sales are up nearly nine percent year-over-year and are expected to go even higher, as favorable weather sets in.
Up until 2014, Tesla was a bet no daredevil would risk to take. Come 2015, things started to shift in Tesla’s favor. New model launches, the “Gigafactory” project, and a new product line of the “Powerwall” became the top reasons to believe in this company.
But with good news came bad news. Sluggish production, delayed deliveries, and recalls raised question marks on the company’s ability to become a mainstream automaker.
Prospective investors are now torn between two extreme choices: On one side, there are the hardcore bulls, led by the likes of Trip Chowdhry, who set an absurdly high $385.00 price target for TSLA stock. On the other side, there are the Tesla bears, led by the likes of short seller Andrew Left, who give the stock a valuation of less than $100.00.
If sanity prevails, investors would not swear their allegiance to either of these extreme clubs.
Global Equities analyst Trip Chowdhry is a diehard Tesla bull who has so far been wrong on virtually all of his wildly bullish predictions. On the contrary, Andrew Left of Citron Research is a notorious short seller whose disclosures have historically taken down a number of popular stocks, but failed to do any harm to Tesla stock.
It’s obvious now that a moderate take on TSLA stock is the best bet.
The Bottom Line on TSLA Stock
The moderate take on TSLA stock is to not be blinded by fanaticism and acknowledge the genuine threats the company faces. At the same time, accept Tesla’s growing stronghold over the EV industry on the back of some promising launches this year and the next.
In a nutshell, TSLA stock may not be a $385.00 stock just yet, but new launches will likely help it make its way up there in the coming year. I’m thinking long-term!