Tesla had a fantastic year in 2020: the electric car maker was added to the S&P 500, and the stock soared 743 percent. However, some investors have recently pulled the plug on the company.
Tesla (TSLA) shares are nearly 25 percent below their all-time high set earlier in the year, and down 2 percent for 2021 to date -— a time when traditional automakers are surging as they ramp up electric vehicle ambitions.
Ford (F) stock is up nearly 75 percent , putting it in the top 10 of the S&P 500 in 2021. Last month, Ford unveiled its electric F-150 Lightning truck, as well as announcing to investors that electric vehicles will account for 40% of global sales by 2030.
And GM (GM) is up more than 40 percent as well. The maker of Chevrolet, Buick, and Cadillac announced earlier this month that it plans to spend $35 billion on electric vehicles by 2025.
Investors appear to be enthralled by the legacy Big 3 automakers’ plans to rapidly expand their electric vehicle offerings in order to catch up to Tesla.
Tesla continues to expand at a breakneck pace. Earnings per share are expected to more than double this year and grow at a 45 percent annual rate over the next few years, according to analysts.
Tesla, on the other hand, is one of the most divisive stocks on Wall Street.
According to Refinitiv, 14 analysts have given the stock a “buy,” 13 have given it a “hold,” and 10 have given it a “sell.” GM, on the other hand, has 20 buy ratings, two holds, and no sells.
Analysts’ consensus target price for Tesla stock is $652, which is about 6% lower than its current price.
Tesla skeptics have a long list of concerns. The company is being shorted by a well-known short seller who was featured in the film “The Big Short.” After longtime executive Jerome Guillen abruptly left earlier this month, there were concerns about Tesla’s management bench, especially since CEO Elon Musk is also running SpaceX.
And some investors and analysts may be turned off by Musk’s obsession with bitcoin and dogecoin, as well as other extracurricular activities like hosting Saturday Night Live and constantly tweeting.
Nonetheless, there’s no denying that the company has a devoted following, and its vehicles have garnered a slew of positive press this week.
For example, Cars.com (CARS) announced earlier this week that Tesla’s Model 3 was ranked first in its American-Made Index, which considers factors like domestic factory jobs, manufacturing plants, and parts sourcing to determine how much a vehicle contributes to the US economy.
The Tesla Model 3 beat out Ford’s Mustang for first place, and Tesla’s Model Y came in third. Following the news, Tesla stock jumped more than 5% on Wednesday.
The stock rose even higher on Thursday after Musk tweeted the night before that Tesla shareholders may be given preferential treatment in purchasing shares of SpaceX-owned Starlink if the company decides to spin it off in a few years.
Even though Tesla’s stock is still losing money this year, it has quickly recovered much of its 2021 losses following a more than 12% gain in the last five days.
Tesla is nothing if it isn’t a wild ride.