TSLA - Ignore The Pessimism: Tesla Is Undervalued Isn't Likely To Collapse Anytime Soon
2024-01-26 14:50:55 ET
Summary
- Despite recent stock declines of 28.88%, attributed to falling margins and a subsequent 10% drop post-Q4 2023 earnings, I maintain a strong buy rating on Tesla, Inc. shares.
- The current dip in stock price renders Tesla undervalued, presenting an opportune moment for investment.
- Tesla's charging network anticipates a 36% growth, while potential in the insurance and solar sectors indicates promising revenue streams.
- Financially, Tesla displays robust metrics with decreasing debt, surging cash reserves, and growing free cash flow.
- Valuation models project significant upside potential for Tesla, estimating a fair price per share of $311.12 to $358.89, offering considerable returns, despite risks including sales projections, CEO Elon Musk's controversial conduct, and competition from Chinese car companies. Tesla's commitment to price cuts and profitability aligns with its long-term vision of democratizing electric vehicles.
Thesis
In my previous article , I discussed many possible outcomes for Tesla, Inc. ( TSLA ). Since that article, the stock has tanked by 28.88% because of the fall in margins.
After the Q4 2023 earnings release , TSLA stock tanked around 10% fueled by a miss on revenue and Tesla's warning of a slowdown this year. Nevertheless, I will maintain my strong buy rating on Tesla stock, and I will demonstrate why this fall in stock price has made Tesla's stock undervalued....
Ignore The Pessimism: Tesla Is Undervalued, Isn't Likely To Collapse Anytime Soon