Tesla stock predictions are doing the rounds as it plunged 20% from its highs.
You have one segment of the market that is tired of Elon Musk’s promises.
But there are many who will convince you this is the best time to buy.
Though there have been some intermittent bouts of gains, it is still way off its highs.
The Tesla stock is currently hovering close to the $340 levels.
For most market experts, this is considered to be a crucial level.
The support for the stock is seen around $300.
The assumption is if it does not break below, it can rise to even $400 a share.
This essentially means technical point to higher gains in coming months.
So if you are invested in the stock, you can wait for better gains.
At the same time, you can also use the current dip to enter the stock.
Another trigger for this is the latest prophecy from Tesla Chief, Elon Musk.
He expects Tesla to become a trillion dollar company in 10-years.
Needless to mention that the street is fairly excited about the stock going forward.
However, apart from technicals, a bit of fundamental check is also necessary.
After all, this is not the first time that Musk has made a prediction.
Earlier, there have been several such instances.
But there have been disappointments too.
The Tesla’s electric car is one of the biggest triggers thus far.
But whether you agree or disagree with him, you will agree that 2018 is a crucial year.
In many ways, it is a make or break year for the stock.
Headed by a maverick entrepreneur, this is a stock with huge potential.
The question is will the Tesla stock predictions stand the test of time.
The Tesla Stock Price Chart Analysis to Have an Overview for the Next Several Years
There is no doubt that Tesla is a solid company and those who buy the Tesla stock, will be a winner, at least in long-term.
Tesla is doing really good.
However, here is our detailed analysis on the Tesla stock price chart to predict the next Tesla stock price movements.
According to the below chart, Tesla stock price has passed four phases so far, and now is in the 5th phase:
It has moved below $40 and sideways from 2010 to 2013.
It strongly broke above $40 on April 2013 and moved up strongly.
It goes as high as $280 in September 2014.
It moves sideways below $280 for several years.
It starts going up again in December 2016 and breaks above $280 in April 2017.
It reaches $384 in June 2017.
Since June 2017, it has started moving sideways.
Now, the question is where the price will go from now on?
According to the below chart and the broken resistance levels that it shows, the price can go down to retest the $280 level.
However, as Tesla is doing great, most probably its stock price won’t break below the $280 level.
Most probably, it will finally break above the $384 level, will go higher and will form another resistance level at a higher price, probably at $480.
So, buying the Tesla stock can be a great investment.
If you want to have a good entry, you can wait for the price to retest the $280 level first.
You can enter this market then.
However, there is a risk of missing the current opportunity here, because it is possible that Tesla goes up strongly even without retesting of the $280 level.
Tesla Stock Predictions: Multiple Opportunities
When you look at Tesla stock predictions, the first step is to analyze opportunities.
This will give you a fair idea about why the stock deserves the attention it is getting.
In fact, when you discuss opportunities for this innovation major, there are just plenty.
The next few years seems to be like exciting times ahead for the company.
The company’s CEO, Elon Musk has declared a number of options.
That apart, some innovations are already underway.
It will not be wrong to say that these innovations sure excite the investor’s imagination.
Whether you look at the super batteries or solar rooftops, the possibilities are huge.
The 18-wheel long-haul trucking initiative to electric crossovers, there are wows galore.
It is practically recreating your imagination into reality.
However, the Model 3 mass-market electric sedan is one of the most awaited innovations.
Needless to mention that the market is looking at these opportunities with huge hope.
I think the biggest trigger for Tesla is providing a mirror for future.
The company is trying to prepare for the challenges in future.
As a consumer, you will surely like to own stories that are future prepared.
But just providing an insight is never enough.
It is also important to assess how they get to that point.
That, in reality, will help ascertain deeper value to any stock.
So, in this context, the long-term probabilities need to be examined.
The idea is not how Tesla will fare in the immediate future.
Whatever the stock does, the long-term value perspective is important.
The makers of Tesla will have to create a model that convinces investors over the long-term.
This is where the intrinsic value of the stock emerges.
Based on these factors, you have to reconsider the support and resistance levels.
Model 3 Production Plan
The Model 3 production plan is one of the most important triggers.
The Tesla stock prediction invariably assigns a huge value to the company’s plan.
It is not just an environmental-friendly alternative but a reflection of sustainable innovation.
In many ways, it is preparing the world for petroleum-free future.
2018 is likely to see a robust ramp-up in production of these electronic sedans.
This is, however, preceded by several quarters of disappointing growth.
In the last 6 months of 2017, Tesla was not able to fulfill its target production.
Tesla had expected to produce about 100 Model 3 cars in August 2017.
They had also expected to increase that number by 15% in September.
However, much to Musk’s embarrassment, the total delivery was only 222 sedans by Sep-end.
This too was primarily internal deliveries.
Most of the recipients included Tesla’s employees.
But by November 2017, the optimism about the future ramp up again resurfaced.
This was because Tesla finally started delivering to outside customers as well.
The street was so buoyant with this that many experts expected an imminent price rise.
In fact, if you go through Wall Street expectation, the numbers are quite mind-boggling.
The street expects nearly 15000 Model 3 deliveries before the end of 2018.
Though this is a far cry from Musk’s initial estimates, it surely is a progress.
In fact on a quarter on quarter basis, you can see a straight 20x appreciation.
However, this again is an indicative number.
Though, this seems far more attainable than Musk’s 5000 cars per week target.
The jury is still out on that one.
But common sense will tell you under 1500 Model 3 seem realistic.
It is possible for the company to achieve.
Whether they can ramp it up further needs to be seen.
The Big Battery Warehouse Deal
You don’t have to be an expert to see the sudden spike in prices.
Despite the sharp fall, the stock managed to recover some ground.
The overall sentiment is also relatively bullish compared to late 2017 or Jan 2018.
That will make you think about what led to the sudden optimism.
Well, the street knows that this optimism is strongly rooted in hope.
It is primarily on the back of a recent development in the Tesla stock.
It is about a promise that CEO Musk made and delivered as well.
The maverick Tesla chief promised to build a 100 MW battery storage facility in 100 days.
Though there are some finer details to this development as well.
The company had already built some parts of this facility before Musk made the contract.
Tesla started the 100 days countdown after this.
But that said, you cannot deny that the company delivered as per the contract terms.
Both the budget and the time frame was as per the pre-decided contract.
The South Australian Tesla Powerpack system is already operational.
This massive battery storage unit is performing quite well.
This surely adds a positive punch to the overall company’s future line-up.
The performance track record
In fact, in December 2017, it helped smoothen out power outages in Australia.
The Tesla batteries kicked within seconds of the power failure.
This is a decided improvement compared to the coal plant back-up.
Firing that up and finally take overstretched to minutes in that case.
So, it is needless to mention that this battery system helped address blackouts constructively.
It also reduced instances of blackout across the region to a significant extent.
It is, therefore, a major plus from the company’s perspective.
There are several countries across the world who are facing the same challenge.
They can surely get in touch with Tesla to remedy it.
That means only one thing, more business and better revenue.
The market for these mega battery storage units is huge.
A few conservative estimates see production scaling north of 300,000 megawatts.
There is adequate demand to make over 2000 such units as it constructed in Australia.
Even if you see them at the current cost of close to $50 million apiece, the net outgo is over $100 billion.
This is just a potential contract estimate.
The final numbers are based on how hard it negotiates.
That sure will be a key catalyst.
Tesla Will Need Cash
It goes without saying that all of these won’t happen on its own.
Tesla will have to be extremely aggressive in selling and producing its products.
But for that, it has to also put in large chunks of dollars.
The question then is how will it generate or source that kind of money.
The general assumption is that the company may sell shares.
Tesla has many opportunities to capitalize on.
It can be the Model 3 electric cars production or the Model Y crossovers.
Or even the electric semi-truck or these battery storage units.
All of these are extremely cash intensive propositions.
These will undeniably improve future prospects for Tesla.
But at the same time, they will be a huge drain on the limited cash availability.
Tesla is extremely stretched for cash at the moment.
According to some rough calculations, the cash requirement is north of $4 billion a year.
But Tesla’s cash reserve is quite paltry.
It is barely a little above $3 billion at $3.5 billion.
Along with this, the company also has to service close to $10 billion debt.
You don’t have to be a financial expert to understand that this is a stretched income scenario.
The company has to generate some meaningful cash to get out of this.
They will need additional money to finance all their extreme innovation.
So, 2018 will also be the year of reckoning for Tesla.
They have to look at ways to generate reasonably large cash.
That, in many ways, is the only way to get out of this.
So the chances are that Tesla resorts to selling its own share.
The prices are good and well above the floor or support levels.
In that scenario, it will be great option to raise funds quick.
How Should Investors Act?
Now you can wonder whether this is good or bad news.
Well if I had to make a Tesla stock prediction, I will say there are some positives here too.
Though Tesla has slipped over 10% from its December 2017 highs, it is still up.
In fact, the stock is a good 40% up for the year.
So the Tesla stock emanates reasonable value.
As a result, I feel Musk will be able to sell the shares at a great rate.
Now, this is the most important factor in the Tesla stock prediction.
This assures investors that the prices are unlikely to nosedive unnecessarily.
Though a healthy correction is always welcome, it will not lead to drastic devaluation.
As long as the Tesla management uses the fund constructively, it indicates a positive trend.
There are enough reasons to assume that the Tesla stock will maintain the upward trajectory.
This means that the street will now look at the next resistance level.
The current price trend indicates at least $400 a share level.
So investors will stand to gain from the current price scenario.
Perhaps this is why you saw many investors using the recent dip as a buying opportunity.
The value is embedded solely in the kind of price projection likely.
So you have many experts giving you the Buy signal.
This means investors can take advantage of the recent dip.
It will also brace them for substantial gains by the end of 2018.
This is a predominant expectation across the street.
The Brokerage Views
A Tesla stock prediction is incomplete without Brokerage views.
But the above analysis will convince you about the street’s expectation too.
Majority of the brokers and analysts on Wall Street have a HOLD on the stock.
There are some more optimistic analysts who also recommend a BUY.
The average price target for the stock is seen around $316 per share.
Needless to mention that it is trading well over that mark currently.
The number of analysts who are Underweight on the stock has reduced.
On the contrary, you have a few brokers who are OVERWEIGHT on the stock.
That surely augurs well on the street and helps it maintain the positive bias.
With a market cap close to $30 billion, the stock indicates clear value at the moment.
Though not the cheapest, it is surely a promising story going forward.
Many believe if it can overcome the challenges, this cult stock return strong value.
Challenges For Tesla
But that is exactly why you need to consider the challenges.
This automotive major is undeniably a cult creation.
But that said, there are some distinct red flags as well.
Any Tesla stock prediction has to consider these.
Only then, they will be able to deliver meaningful value over the long-term.
The biggest question in this context is whether Tesla and Musk are overleveraged.
We already detailed the precarious financial situation of the company.
The question is, in that context, will they be able to keep their boat afloat?
Will the company and its future be weighed down by the weight of their debt?
The other primary concern is competition.
The Model S and Model X are clear leaders in the luxury electric car segment.
But the question is will Tesla be able to sell more affordable variants?
The Model 3, for example, has to be a true mass market vehicle for ultimate value.
In many ways, that will determine the future revenue inflow for Tesla.
Nissan and GM are already getting the act together.
GM’s Bolt was delivered to over 3000 customers by December 2017.
This is more than double the number of Model 3 produced in the last quarter of 2017.
That means Tesla’s delivery and production issues are far from resolved.
Tesla is also ramping up its semi truck production for big names.
Walmart and IPS have already associated with the company in terms of orders.
But the problem is that the company is losing money continuously.
So funding its ambitious plans is a matter of concerns.
The potential share sale to fund expansion is seen as another problem.
So a certain segment of the street is worried.
They are wondering if Tesla bit off more than what it can actually bite?
So the overall Tesla stock prediction is in the current range.
Though the stock is likely to maintain a positive stance, sudden spikes are unlikely.
A lot of the price already factors in the current triggers for expansion.
Conservative estimates indicate an upward bias till May 2018.
Prices may appreciate a percent more from current levels and hold around $360 mark.
But the next few months are likely to clock sharp losses exceeding 4%.
As a result, there is every chance of prices slipping to $310 levels.
But that will not continue for long.
By the year-end, prices may move back to current rates.
So expect a range bound trade as per current Tesla stock predictions.
So for long-term investors, this is a buying opportunity as per Tesla stock prediction.