Tesla, Inc.'s TSLA stock has often polarized analysts, with bears questioning the rally that has left the company with an unsustainable valuation and bulls opining that the stock’s story has more legs to play out.
Bullish analyst Daniel Ives from Wedbush and Tesla bear Gordon Johnson shared their thoughts on CNBC on Friday.
Bears To Go To Hibernation Mode: Tesla's current valuation does not worry Wedbush, said Daniel Ives, adding, “The Tesla story is just starting to be discovered.” The company’s Supercharger was really “where the light bulb went up,” with General Motors Corp. GM and Ford Motor Co. F joining Tesla's North American Charging Standard, the analyst said.
“Now really you’re going to test whether this is sort of a what-I-do-as-a-game-set-match situation,” Ives said. The next is going to be batteries and then AI, he added.
The Wedbush analyst said he believes the company is, therefore, still in the early innings of finding its potential.
“I think, next week, another trophy case quarter in terms of where, you know, Musk and Tesla and, in my opinion, the bears will continue going to hibernation mode as Musk and Tesla flex their muscles,” Ives said.
See Also: Everything You Need To Know About Tesla Stock
A Looming Collapse? Johnson differed with Ives about the prospects of the charging partnership. He noted that Tesla has not made money on it and that the company was forced to open up its charging stations to get tax credits.
Tesla, Johnson said, is valued at more than the next 10 largest automakers combined despite its earnings dropping in the first quarter. The company has had to significantly slash prices and hasn't been able to sell all the vehicles it has produced, even while its CEO Elon Musk continues to talk about building factories, he said.
Johnson also said that stock prices do not always equal reality and that Tesla's margins are collapsing. He noted that Tesla has cut prices in China, Australia and Japan already in the second quarter while its rivals have avoided making similar cuts, suggesting that the company is facing a demand problem.
Tesla ended Friday’s session up 1.25% at $281.38, according to Benzinga Pro data. The stock has risen 128% year-to-date.
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