Sign InTesla Stock Shows Momentum and Potential for Growth Amidst High Liquidity and Volatility
Summary
As of June 30, 2023, Tesla's stock closed at $261.77 with a 1.66% change, indicating significant interest and high liquidity, and its upward momentum, supported by a strong RSI value, presents a potential opportunity for short-term gains, but its high P/E ratio and competitive pressures suggest a cautious approach for mid-to-long term investors, categorizing it as a Hold.
General Overview
Tesla, Inc. (ticker: TSLA) closed at $261.77 on June 30, 2023, highlighting a change of $4.27 or 1.66%. The stock traded between $259.89 and $264.45 during the day, indicating a significant interest in the stock. With a Market Capitalization of $829.68 billion, Tesla represents a major player in the NASDAQ.
Volume and Liquidity
Tesla has a substantial volume of trading, with 110.77 million shares traded on the last trading day. This volume was below the average volume of 140.08 million but still reflects high liquidity and interest in the security.
Volatility and Momentum
Tesla presented a Relative Strength Index (RSI14) of 59. This value, situated between 50 and 70, can represent a potential upward momentum in its stock price. The 50-Day Moving Average (201.68) and the 200-Day Moving Average (194.72) provide further evidence of this upward trend. The MACD for the last three months is 28.75, indicating a potentially bullish market for Tesla.
Valuation
The Price to Earnings (PE) ratio stands at 81.55, suggesting a relatively high valuation compared to earnings. Investors thus seem to be expecting significant future growth. Moreover, Tesla reported an Earnings per Share (EPS) of $3.21. The discounted cash flow (DCF), which considers future free cash flow projections discounted back to the present value, is estimated at $268.15. This higher DCF value compared to the last closing price may suggest that the stock is undervalued. Additionally, the target consensus of $287.54 aligns with this view.
Recent News
Recent news show that Tesla was part of the leading faction that pulled the stock market higher. The company is acknowledged for its growing dominance in electrification and plans to integrate its NACS connectors into Electrify America's fast charging stations by 2025. This strategic alliance may validate Tesla's leadership in electric vehicle infrastructure. However, concerns exist on the stock’s rally driven not by sound fundamentals but a price cut strategy. The risk-reward profile is questioned with Tesla forecasted to face increased competition, potentially leading to a shrinking market share towards 2026.
Future Predictions & Recommendation
The stock is predicted to open at around $262.00 on July 03, 2023 - this deduces from its last close price and upward trending Moving Averages. In the upcoming week, however, the stock may vary within a wide price bracket due to high volatility, likely trading between its recent high of $264.45 and a theoretical low estimated from its 50-day moving average (~$202.00).
Despite the concerns raised by some market analysts, Tesla's ongoing dominance and future plans align well with the growing electrification trend. Its strong RSI value supports a potential opportunity for short-term gains.
However, Tesla’s high P/E ratio combined with competitive pressures necessitates a cautious approach. Therefore, for mid-to-long term investors, Tesla could be classified as a Hold. But, for short-term investors or day traders, the volatility and momentum suggest a Buy situation for potential gains. Future news and earnings announcement due on 07/18/2023 also might impact this recommendation.
