Tesla Stock – Boom or Bust?

Elon Musk made headlines a few days ago. Again. And I am not talking here about his baby’s name.

He tweeted: Tesla is restarting production today against Alameda County rules. I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.

Before this he even threatened to move Tesla headquarters out of the state of California after the interim health officer for the Alameda County Public Health Department, said the county had not yet given Tesla the green light to reopen its factory.

As for most of the people this may a be a fresh source of entertainment, some analysts are being worried about the company’s future.

Early this month it was Musk himself that tweeted: “Tesla stock price is too high imo [in my opinion],”. The company’s shares closed at $701.32 at the end of the trading day on May 1. Musk’s warning about Tesla’s shares being overvalued signals trouble ahead for the company in meeting its sales targets.

Tesla reported first-quarter deliveries just a bit lower than consensus.Tesla says it delivered 50,900 Model 3 cars in the first quarter, below the 52,450 analysts expected in a consensus estimate from FactSet.

The stock is up 77% so far this year, contrasting with losses around 14% for the S&P 500 index. SPX, +0.39% Shares are down 47% from their all-time closing high of $917.42 on Feb. 19.

Analyst Dan Ives of Wedbush considered it a small victory. “It appears (Tesla’s) China production and demand are starting to rebound and should be a key growth driver over the coming quarters, although clear challenges remain in the months ahead as Tesla (and every other company) navigates this treacherous consumer landscape,” he said.

While Canaccord Genuity sees the numbers as quite encouraging.
“lt’s as a clear indication that EV demand had remained strong for Tesla well into the quarter, and that the company is well positioned to satisfy that renewed demand once the COVID-19 pandemic abates,” they said.

In a recent article in MarketWatch, Jeff Reeves analyses the significant catalysts that, should they materialise, could keep Tesla running to new highs in 2020.

Some analysts remain convinced the firm’s 2020 manufacturing volume will likely be in the low 400,000s and not quite up to the ambitious 500,000 target previously plotted by Musk & Co. However, that strong first-quarter performance and the looming end of a manufacturing shutdown should give investors hope.

Also we should keep in mind the fact that Tesla is setting records and gobbling up market share in China, however, make its growth story even more compelling.

Although the S&P has lost some slight value since the early part of 2020, Tesla shares have actually risen. Q2 is a very important period for Tesla, and the ability for Tesla to get its Fremont factory running again and back to full production is key to Q2 success.

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