Tesla Motors Inc shares back in the bear zone after another overvaluation slap from Standpoint and rising questions over Model 3 key features
Tesla Motors Inc (NASDAQ:TSLA) shares had been growing robustly over the past few years on the back of its first forays in the mass-market arena. However, the stock declined roughly 6% in the last two trading sessions.
On Friday, Tesla stock hit an intra-day low of $248.02 and closed the market down 2.77% at $250.07. The shares fell over 5.78% from Wednesday’s closing price of $265.42.
Firstly, the automaker’s shares were downgraded by Standpoint Research from Hold to Sell, claiming that the stock is too overvalued. Analyst Ronnie Moas believes that the recent surge in Tesla stock was due to short covering over the historical Model 3 event.
Mr. Moas thinks the market is treating Tesla like the world’s most valuable company, comparing with the likes of Apple Inc. (NASDAQ:AAPL) or the largest US online retailer, Amazon.com, Inc. (NASDAQ:AMZN) and he believes the EV maker is neither.
He further added that even if Tesla’s revenue shot up to $15 billion in 2018, it will be far behind the world’s third largest automaker; General Motors Company (NYSE:GM), which makes $150 billion annually. Yet, the Street is treating them as equals. So, basically the analyst ignores the fact Tesla is indeed the game-changer in the automobile market.
Additionally, Tesla changed the wording for the three main features of its recently unveiled vehicle, the Model 3: Autopilot, safety rating and Supercharging capability. Now it appears that advanced Autopilot feature will have be purchased, safety rating will be advertised after NTHSA approves post-launch and Supercharging service may not be for free.
These features are like a backbone for Tesla cars, giving them superior competitive advantage over other brands in the market. While there is no car manufacturer whose vehicle has a better safety rating than Tesla, the autonomous-driving features in the company’s vehicles are a huge breakthrough in the automobile industry. Additionally, Supercharger is the fastest charging technology on earth that could add 170 miles to a Tesla car with 30 minutes. The company has a culture of continuous innovations and seeks to provide the best experience to its owners in the future.