JThe value of esla shares has fluctuated in recent weeks due to several factors, the most notable of which being CEO Elon Musk’s chaotic $44 billion Twitter deal. Some analysts, however, say the recent stock sale has overshadowed several key positive aspects of Tesla’s story and the opportunities that could arise from it, including a “compelling entry point.”
See: Tesla Loses Over $500 Million Due to Bitcoin Crash – Is Your Investment Safe?
Find: Elon Musk says Tesla cuts 10% of salaried workers, 3.5% of total workforce
Recently, the stock price has been hurt by a large tech sell-off, growing recession fears, COVID-19-related production issues at its Shanghai factory, Musk stock sales to fund its acquisition forecast from Twitter and concerns related to revenue and EPS growth. competition and rising costs, Garrett Nelson, vice president and principal equity analyst at CFRA Research, wrote in a memo sent to GOBankingRates.
In turn, he says “Tesla has been unfairly punished by the market”, saying these factors overshadow several key positives, including exceptional operational execution and earnings, future production growth since the recent start-up of factories in ‘Austin and Berlin, a spectacular balance. sheet improvement and an impressive pipeline of future products.
“We view Tesla as a company with industry disruption potential, market share gains and long-term stock performance similar to companies like Apple and Amazon in the 2010s, and a 38-year sell-off. 5% year-to-date in equities has created a compelling entry point,” Nelson wrote. “Caught up in the recent tech sell-off as well as company and industry-specific issues, Tesla shares recently “put on sale.” We believe selling the stock has created a very attractive entry point into one of the market’s most compelling growth stories – an investment with similar long-term return potential to tech disruptors such as ‘Apple or Amazon several years ago.
The CFRA addresses additional concerns, including increased competition, which it considers overdone “because we expect most new models to sell poorly.” Soaring gasoline prices could also be positive for Tesla, according to the CFRA, citing Kelley Blue Book/Cox Automotive recently estimating that U.S. EV sales jumped 76% in the first quarter of 2022, surpassing a far cry from the 15.7% drop in total new vehicle sales. The market share of electric vehicles increased to 5.2% of total new vehicle sales in the United States in the first quarter, compared to 2.5% in the first quarter of 2021.
CFRA Research has a strong buy view and a $1,200 price target on Tesla shares.
On June 21, Musk clarified how many Tesla employees would lose their jobs, following comments he made earlier this month about downsizing.
Speaking at the Qatar Economic Forum on June 21, Musk said his electric vehicle company’s workforce would be cut by 10% over the next three months, but the overall workforce reduction would only be around 3.5% as hourly headcount is expected to increase further, according to Bloomberg.
And on June 10, Tesla finally revealed the long-awaited details of its 3-for-1 stock split in a Securities and Exchange Commission (SEC) filing. The company also said board member Larry Ellison would step down and not be replaced.
Investors had been waiting for details since a split was announced in late March. Tesla announced at the time that it would ask shareholders to vote to authorize additional shares (to allow for a stock split) at this year’s annual meeting. The company said the split will allow more investors to afford to invest in it and expand its audience and reach, as GOBankingRates previously reported.
Find out: How much you would have made if you invested your stimulus checks in Tesla, Apple and other top stocks
Shares of the electric vehicle (EV) company are down 40.7% year-to-date and 1.6% in premarket trading on June 22.
More from GOBankingRates
This article originally appeared on GOBankingRates.com: Though Tesla shares are down, experts say they’re still a ‘solid buy’
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.