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It is expected that the anticipated entry into the Indian market as well as its proposed self-driving taxis are a good sign that may help justify the current Tesla stock price.
Craig Irwin, a senior research analyst at Roth Capital Partners has weighed in on the massive valuation of American electric vehicle maker Tesla Inc (NASDAQ: TSLA) and its stock price, noting the company’s stock is overvalued and should be worth only $150. As reported by CNBC, Irwin said that Tesla is a “minor player” in the broader United States and EU automotive marketplace and will need to do more to justify this $690 valuation despite its current market capitalization of over $663 billion surpassing the valuation of the markets in these two regions respectively.
Tesla has been a darling automaker to investors with great sentiments and delivery performance sending the company’s shares up by more than 700% in 2020 and followed by a sustained performance through the first quarter of 2021. Irwin’s $150 quoted worth on the price of the stock is about a 78% discount from the current pricing of $690.
According to the analyst, the chances of Tesla surpassing estimates is “clearly already in valuation,” and the overall hype brings a little dislocation to the market realities as people deal with the firm on the premises that it has no competitor.
“So for me, I see this as a market dislocation, I see this as something avoiding analysis of the fundamentals and I think there’s room for many successful companies in the market. People are just assuming that Tesla has no competition when they put this kind of lofty valuation on the company,” he said.
Irwin Bullish on EV Industry, Tesla Stock Price
It is worthy to note that Irwin’s stance about the current Tesla stock price and what it should be worth had it not been overvalued is not a bearish stance on the EV giant. He expressed optimism about the prospects of the electric vehicle industry in general of which Tesla is a renowned leader.
Irwin however believes the anticipated entry into Indian markets as well as its proposed self-driving taxis are a good sign that may help justify the current stock valuation.
“They would really need to deliver on the robotaxis, the fully autonomous vehicles,” Irwin said, adding that Tesla appeared to pull back its push in that area, as other companies are aggressively storming the market with “vastly superior technology.”
Perhaps one of the broader ways Tesla will justify its valuation over time is through its Bitcoin (BTC) investments. The automaker invested as much as $1.5 billion in the premier digital currency back in February and is now allowing its US customers to purchase its products using BTC.
Tesla stock closed Tuesday’s session with a slight gain of 0.082%, adding 57 cents to close at $691.62. The shares are on a downtrend of 0.22% in the pre-market to $690.10.