Tesla (NASDAQ: TSLA) shares rebounded during early trading hours on Thursday after a sharp decline during Wednesday’s session.
After starting Wednesday’s trading session at $646, shares felt a sharp decline after a large sell-off of tech stocks in a relatively bearish day for Wall Street’s big winners. TSLA shares were not immune to the drop, and the company closed yesterday’s trading session at $604.48 before dropping even more in after hours. Tesla’s shares have rebounded nicely and are back above the $600 mark, trading at $612.38 at the time of writing.
After hitting record highs during Tuesday’s session, TSLA and other tech stocks felt the heat on Wednesday. The Motley Fool believes that it was simply a “breather” day for growth stocks like TSLA, but another factor could have contributed to a sell-off of the electric automaker’s shares during the Wednesday session.
JPMorgan’s Ryan Brinkman called TSLA “dramatically overvalued” while bumping his price target by $10 from $80 to $90. After his investor’s note detailed Tesla shares by describing them as overvalued “by virtually every conventional metric,” some analysts are not too sure that the electric automaker’s price per share is as outlandish as Brinkman made it seem.
For example, Goldman Sachs analyst Mark Delaney boosted his TSLA price target to $780 from $455, citing the mass adoption of EVs within the next several years as plenty of evidence that Tesla could see large scale success in the sector. With Tesla maintaining a sizeable lead over other companies in the EV market, there is evidence that the stock isn’t just an “overpriced” phenomenon on Wall Street.
Additionally, other factors are driving the price per share into the stratosphere, and it could have to do with the demographic of investors that TSLA attracts. Jim Cramer, a notable TSLA bull says that retail and younger investors simply don’t care about the metrics that Brinkman spoke of in his note. They care about what Tesla offers as a company at face value, which is “a genius” who makes good cars that everyone wants, according to Cramer.
Tesla is set to leave NASDAQ and join the S&P 500 on December 21st in one tranche.
Disclaimer: Joey Klender is a TSLA Shareholder.