Gordon Johnson of Axiom Capital Management believes that shares of Tesla Motors (TSLA) are grossly overvalued and have much further to fall.
“I think Tesla’s a $50 stock,” Johnson said Thursday on CNBC. “Essentially, people are valuing this car, again, on a gen-3 model for which there is no prototype. Tesla’s cars cost about $80K to $90K right now. They are using essentially laptop batteries. They are packaging Panasonic laptop batteries into these car batteries, which are effectively the bulk of the cost. Those batteries have been scaled up. How are they going to get more cost out of that? I don’t know.”
Johnson thinks the stock of the popular but controversial electric car maker– three Tesla Model S cars have caught fire after crashing in the past five weeks — is “grossly overvalued,” and that the ticker’s “correction is not anywhere near done”.
Dan Nathan of RiskReversal.com said that shares of Tesla have enjoyed good support at the $135 level, followed by $120. It would remain to be seen beyond that, he said, adding, “There’s a lot of room below.”
But Wedbush Securities analyst Craig Irwin insisted that the latest news of another battery fire from the California-based company wouldn’t hurt TSLA’s long-term outlook.
Shares of Tesla closed down $11.39, or 7.53%, to $139.77 in after hours trading Thursday. That’s after nosediving nearly 15% Wednesday.
At Thursday’s close, TSLA is still up $110.85, or 384%. The equity’s 52-wk high is $194.50. The 52-wk low is $29.85.
It’s worth noting that at nearly $140 a share Tesla still remain ahead of itself value-wise, if one considers the stock’s current pps suggests 25% CAGR for the next two decades.