Investor's Corner

Tesla (TSLA) bear is skeptical of automaker, but says don’t short the stock

An autonomous Tesla Model 3. (Credit: Tesla)

Tesla (NASDAQ: TSLA) has a skeptic in Roth Capital’s Craig Irwin. The bear holds a $150 price target for the electric car company, but still is advising people that the stock is not one that investors should short. Why? “Elon Musk has far too many levers to pull.”

Irwin appeared on CNBC’s Squawk Alley to talk about his stance on Tesla stock and to discuss the dip in price that the company faced over the past week.

“I’m bearish, I have a $150 price target, but I am not recommending people short this stock,” Irwin said. “Elon Musk has far too many levers to pull.”

Irwin, while skeptical, notes that there are a lot of positives that the car company has going for itself. An expanding international reach, new cars that disrupt some of the most popular body styles on the market, and its upcoming Battery Day are a few. However, he still believes that Tesla’s stock is overvalued.

Interestingly, Irwin states that Tesla has no real battery advantages over other car companies. This is despite the fact that Tesla is able to offer more range and superior performance specifications compared to any other EV on the market. If that were the case, Tesla wouldn’t have a substantial lead in the sector of electrified transportation.

Irwin’s advice on what to do with TSLA: “Stay out of the way.”

“It is egregiously overvalued. It’s almost being valued not for autonomous, but for teleportation,” he said.

Despite Irwin’s thoughts, Tesla’s valuation is based more on growth in deliveries and sales and beating Wall Street’s expectations repeatedly. The company has four straight profitable quarters, and its developments in battery technology have driven the company’s valuation through the roof in 2020.

Irwin does credit Musk’s performance as a CEO as a significant factor in Tesla’s success.

“Musk is executing impeccably; they are the world’s leader in electric vehicles. But Irwin says, “there is a scarcity problem,” for the U.S. market, which is “dependent on the completion of the Texas Gigafactory on schedule.”

Tesla also has several competitors who are improving and approaching quickly, according to the Roth analyst. With Lucid unveiling the Air sedan to the world last night in an online unveiling, and Volkswagen working toward launching its ID family of cars, there is competition. However, many companies have stated they are the “next Tesla” and will take the electric car company off of its throne.

That remains to be seen as of right now, and Tesla remains on the proverbial pedestal as the company’s share price begins to rise.

Disclaimer: Joey Klender is a TSLA Shareholder.

Tesla (TSLA) bear is skeptical of automaker, but says don’t short the stock
-->
To Top