It’s hard to imagine this in early 2024, but electric vehicle manufacturer Tesla (NASDAQ:TSLA) was once a favorite among stock traders and analysts. Nowadays, however, some people want to see Tesla booted from the Magnificent Seven. Yet, looking through a contrarian lens, my TSLA stock analysis is actually bullish because the prevailing sentiment is bearish.
From rusting Cybertrucks to local pushback against Tesla’s proposed German production plant, it seems like practically every Tesla-related news report is negative now. That’s not a problem, however, if you’ve been waiting to buy Tesla stock at a reduced price. After all, every share-price dip must come with some seemingly terrible news. That’s how opportunities happen in the markets!
You Wanted TSLA Stock Below $200? You Got It!
Lately, investors have been so jittery about Tesla and EV manufacturers that they’ll find just about any excuse to dump their shares. For instance, TSLA stock recently fell even though there was no company-specific negative news.
Reportedly, rival automaker XPeng (NYSE:XPEV) warned that intense EV-industry competition could end in a “bloodbath.” If a comment like this will shake you out of your share position, then maybe you’re not really meant to own Tesla stock.
Tesla CEO Elon Musk has said many controversial things. There’s always going to be drama and hyperbole. That’s par for the course in the fast-paced, sometime brutal world of new-energy vehicles.
Besides, Tesla is a much bigger, better capitalized and more famous automaker than XPeng. If there’s a “bloodbath” among EV manufacturers, Tesla will likely come out on top. So, be grateful when “loose lips sink ships,” as they say. If TSLA stock goes below $200 because a company’s management says something startling, this doesn’t mean you have to change your assessment of Tesla.
Tesla Is Suddenly a Downgrade Target
Here’s an example of the pessimism surrounding Tesla lately. Phillip Securities analysts downgraded Tesla stock from “accumulate” to “neutral” and set a pessimistic $175 price target on the shares.
The Phillip Securities analysts declared that Tesla’s near-term outlook “looks quite bleak, with the company set on sacrificing margins and growth also slowing.” To that, I’d say that Tesla is deploying a specific strategy of reducing its vehicle prices in order to stay competitive and sell more vehicles.
The major barrier for some reluctant EV buyers is that the prices are too high. Besides taking advantage of tax credits, Tesla has brought many first-time EV buyers on board through its pricing strategy.
This will have the side effects of “sacrificing margins” and slowing growth, to a certain extent. Yet, Tesla still grew its fourth-quarter 2023 revenue 3% year over year to $25.1 billion. It’s not as if Tesla is crumbling while its pricing strategy plays out. This is a long-term plan that will require Tesla’s investors to be patient and willing to ride out some volatile patches.
TSLA Stock Analysis: Are You Ready to Ride With a Winner?
Tesla and its CEO are controversial, and sometimes EV-manufacturer executives will say scary things. This doesn’t mean you need to alter your long-term perspective on Tesla.
If the share price dips to $200 or less, contrarian investors should be grateful, not worried. My TSLA stock analysis, when all is said and done, remains bullish for the long term.
There will be speed bumps along the way when executives and analysts make startling statements. The Tesla stock bulls should have the upper hand in the end.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
