Tuesday, December 13, 2011

Why now is the perfect time to buy TSLA

With the recent downgrade by Morgan Stanley of a target price for TSLA to $44/share from $70/share. Now could be the perfect time to buy more of Tesla stock since the share price has fallen from a high of $34+ to now around $29.

Enthusiasm in the broader electric car market has been stalled by general uncertainty over adoption which recently has been augmented by the debacle with the GM volt batteries. Nissan has a successful product and Ford and Toyota are following closely behind. However what people may be missing when looking at Tesla now is the lag between the end of the current Roadster and the beginning of the Model S. Musk has repeatedly talked that the company won't see a profit until after the model S launch and right now we are in that special period where there isn't much news coming out and its just anticipation and waiting for Tesla to fulfill its expectations. The bar is set fairly low with other mass market EV's currently so if the model S is even halfway decent, and maintains with a 300 mile range, then TSLA stock price has a serious hill to climb.

In fact there should be uncertainty in the broader EV car market because so far there simply isn't an EV car out there that is very compelling to buy.

Tesla looks to be coming out with a very compelling electric car and it's first year production is already sold out. The recent downgraded seems to be mainly because of lack of confidence in the broader EV market (which is a valid point) however I personally would not downgrade tesla, since it has been the catalyst for rekindling the EV market and will continue to be the catalyst for the EV market in the future. It is building itself to be the Best of Breed when it comes to EV's, so I see this dip in the stock as a buying opportunity.

My Prediction: [tesla will continue to drop in share price till the announcement in late december of the model X design/ prototype, then TSLA price will go up maybe even to new highs, then the hype will be lost and TSLA share price will drop until reviews of the model S come out after the first vehicles are delivered approximately next summer]

Any thoughts on that prediction? or Any of your own predictions from TSLA fans out there?

2 comments:

  1. Think your summation is spot on with 2 caveats: macro/world market debt and the price of crude oil/gasoline

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  2. Thanks and I agree with your thoughts too and those should be mentioned as well.

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