EV (Electric Vehicle)

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Is it Time to Buy the Drop in Tesla Stock Yet?
ZACKSยท 2025-03-08 02:30
Core Viewpoint - Tesla's stock has experienced significant volatility, down 35% year to date, but remains up over 40% in the last two years, closely matching the S&P 500 but lagging behind the Nasdaq's 57% increase [1][2]. Tesla's Market Performance - Despite fears of slower EV growth and price cuts, Tesla's market dominance has led to a dismissal of these concerns, with TSLA trading 89% above its 52-week low of $138 [2]. - The stock has fallen from nearly $500 in December, but investors remain optimistic about a potential rebound [1]. Investor Sentiment and CEO Influence - Investor sentiment amplifies Tesla's growth potential, justifying its premium valuation compared to the broader market, largely influenced by CEO Elon Musk [3]. - Musk's political alignment with President Trump has raised questions about its impact on Tesla's brand and stock performance [4]. Impact of Political Involvement - Tesla has been more adversely affected than other major tech stocks due to concerns over Trump's tariff policies, although some investors view Musk's political role as a potential advantage for reducing regulatory burdens [5]. Brokerage Recommendations - Tesla has an average broker recommendation (ABR) of 2.79, indicating a mixed sentiment among analysts, with 13 strong buys, 14 holds, and 10 strong sells [6][8]. - The ABR has slightly improved from 2.91 three months ago, reflecting a gradual shift in analyst sentiment [8]. Valuation Metrics - Tesla's current trading valuation is below its historical high of 240X forward earnings, yet slightly above the median of 84.1X over the past three years, indicating a potential buying opportunity for investors [8]. Future Growth Projections - Projections for double-digit growth in fiscal 2025 and FY26 may be premature, but Tesla is still considered a viable long-term investment, with a Zacks Rank of 3 (Hold) [9]. - The average Zacks price target of $348.61 suggests a 32% upside for TSLA, contingent on broader market stabilization [9].