Key Takeaways:
- Tesla stocks are overpriced and overvalued, says expert.
- Analysts price predictions range from $250 to $1,620.
- Tesla’s shares have climbed over 22,000% since it went public.
LAGOS (CoinChapter.com) — Elon Musk’s Tesla stocks have always been a hot ticket item for stock market investors but several experts have expressed concern over the future of the electric car company shares.
In detail, Tesla stocks have been trading in the negative for more than a month, alongside most of the cryptocurrency market. The electric car company shares recent price drop has resulted in debate among forecasters concerning the future of the stock.
Aswath Damodaran, just like many other experts, said the so-called ‘crypto exposure’ stock is bound to collapse eventually. Damodaran said Tesla stock is overpriced and significantly overvalued.
He explained that the costs of making a Tesla might continue to grow and it would affect the company’s stock. Damodaran also indicated that other lower-cost electric car producers might end up dominating the market decreasing Tesla’s stock value.
Furthermore, analysts’ price predictions for Tesla’s stock 12 months from now continue to reasonably differ. The majority of the analysts’ price predictions range from a low of $250 to a high of $1,620, according to data compiled by Bloomberg.
It is worth noting that this is the widest gap of any company in the S&P 500 Index. Interestingly, this is unusual because analysts tend to largely agree on S&P 500 companies and the future of their share prices.
In only about 1% of the cases is the highest price target more than three times greater than the lowest. The most bullish target on Tesla is 6.5 times greater than the most pessimistic.
‘Tesla stock could climb to $1,350 next year’
Despite the unfavorable projections cornering where the shares of Elon Musk’s company are going, some analysts have suggested that the electric car company stocks would increase.
Garrett Nelson, an analyst at CFRA Research, also expressed optimism over the future of the electric car company stocks. He argued that Tesla’s new product will boost the company stock to climb to $1,350 next year.
Another analyst has also pointed out that the electric car producer stock will skyrocket because of Elon Musk’s involvement. He explained that Musk’s personality and the undeniable cool factor of Tesla vehicles will help boost investment in the stock.
Gene Munster, a managing partner at Loup Ventures, indicated that the company’s future was hard to predict. He explained that Tesla’s involvement in electric vehicles, robotics, and energy makes it difficult to predict its future.
However, Munster pointed out that if Tesla is eventually perceived as another car company its shares value will certainly drop. David Trainer, CEO of research firm New Constructs, also said expressed his concern with the future of TSLA pice. He explained that the stock is bound to rise because the electric car company’s future and its stocks are entwined.
Additionally, it is also worth noting that from a larger view the electric car producer stock has been performing well. Tesla’s shares have climbed more than 22,000% since it went public in 2010.
According to data from Bloomberg, Teslas has rewarded investors with an annual return of 58%. On the other hand, S&P 500 has only returned 373% including dividends in the same period, averaging 15% a year.
Ray Dalio’s Bridgewater dumps TSLA in Q1
Meanwhile, the world’s largest hedge fund led by billionaire Ray Dalio has dumped its stake in Tesla (TSLA) in the first quarter of this year.
Bridgewater’s filing with the Securities and Exchange Commission (SEC) indicated that the company tossed its entire stake in Tesla. Bridgewater as of last year owned 25,488 shares of Elon Musk’s electric vehicle company.
However, the SEC filing revealed that the Bridgewater tossed TSLA to snap up 4,136 shares of GameStop valued and 27,066 shares of AMC totaling $667,000. Additionally, Musk’s interest in Twitter has been credited for the company’s plummeting stock prices.
