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Tesla (TSLA) stock is said to be too expensive, but it is up today again. With the company’s growth model, its shares may go more bullish
Tesla Inc (NASDAQ: TSLA) has maintained its upward trajectory since it kicks off on an impressive run in the first four months of 2020. TSLA stock is arguably one of Wall Street’s most expensive and impressive brands this year even in the face of the global crises caused by the coronavirus pandemic.
TSLA stock is often adjudged to be too expensive by Wall Street Analysts. With an impressive run too hard to believe, Tesla CEO Elon Musk tweeted in May.
Tesla stock price is too high imo
— Elon Musk (@elonmusk) May 1, 2020
While the tweet was not meant to cause any intended mishap, it sent the electric auto maker’s stock price to a 10% bearish plunge, a position that corrected in no time. TSLA stock has always been able to pull off bearish calls from analysts. TSLA stock has seen great trading days on Wall Street and the stock has further gained 1.28% in today’s pre-market.
What Has Contributed to TSLA Stock Growth
As Coinspeaker reported, then TSLA stock price rallies in the can be attributed to Elon Musk’s announcement of the Model Y crossover and its proposed price reduction. Furthermore, the vocal CEO also announced that the Standard Range RWD will no longer be available. However, as its replacement, the company will churn out a new 230 mile-range-variant. Musk added that the company will focus more on the long-range RWD version having a range of over 300 miles per charge.
The implementation of unique auto products and flexible marketing strategies somewhat triggered the company’s landmark vehicle sales and deliveries in the COVID-19 pandemic laden second quarter which has also suggested a positive company resilience outlook to investors. With a record of 90,650 deliveries, investors believe that Tesla is on track to deliver as much as 750k vehicle units from 2021. These advanced expectations from the company top the reasons for a new clamor that the stock will be drawn into the S&P 500 index. These series of positive media outlook has contributed to the soaring nature of TSLA stock.
Besides the media hype based on the company’s stellar performances, the automaker is known to adapt to the market situation to better reposition the company. For instance, TSLA is developing a state of the art software that is projected to place it at the top of the auto production ranks when fully deployed. Elon Musk confirmed last month that the company is very close to achieving its autonomous driving technology launch.
“I am extremely confident that level or essentially complete autonomy will happen, and I think will happen very quickly. I think at Tesla, I feel like we are very close to level 5 autonomy,” he said in a statement
Why Tesla Adoption May Not Go Mainstream
With TSLA stock being too expensive, the company is yet to post a consistent year-on-year profit since it was founded back in July 2003. While the company’s auto products offer a great solution to the world’s carbon emission woes, its offered price may be far above the reach of the average earners.
The question on the affordability of Tesla products becomes more niggling when low-income countries are brought into focus. As consistently noted as the brand, not for everyone but when the model of other auto brands which include using the low price model to drive more sales, Tesla may prove to be more profitable as the years roll by. A position that will undoubtedly impact the company’s shares.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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