Tesla (TSLA) is currently undervalued despite its lead in EV race, says analysts

Tesla stock (NASDAQ:TSLA) might have generally calmed down from the volatility it displayed in recent months, but the electric car maker’s shares may still be undervalued. This is despite Tesla maintaining a lead in the electric car race amidst the introduction of competitors from established automakers such as Audi and Porsche. 

JMP analyst Joseph Osha, for one, currently gives TSLA stock an “Outperform” rating along with a price target of $337. This implies an upside of about 45% compared to the company’s recent levels. 

In recent statements related by TipRanks, Osha stated that he believes “Tesla’s leading competitive position in the electric vehicle market supports (his) positive stance on the stock.” The JMP analyst added that the “weak” product launches of competitors makes him “even more confident that Tesla can hold on to its leading position.” 

Osha’s stance on Tesla’s lead in the EV market could be seen by a simple comparison of specs and features between vehicles like the Model X and rivals such as the Audi e-tron. While the e-tron starts at $74,800, less than the Tesla Model X’s $84,990 before incentives, the German all-electric SUV only manages 204 miles of range per charge from its 95 kWh battery. In comparison, the larger, heavier Tesla Model X manages 325 miles of range per charge from its 100 kWh battery pack. 

The JMP analyst did state that Tesla has areas of improvement, particularly in its leadership. While the company has been outpacing its competition so far, Osha explained that he is keen on “change at Tesla,” especially in how the company’s board of directors could better work with CEO Elon Musk. “(It’s) time for the company to truly empower an operating executive to work alongside Musk,” Osha said. 

Tesla’s lead in the electric car market was also highlighted by Macquarie analyst Maynard Um, who recently reiterated his “Outperform” rating and his optimistic $400 price target on TSLA stock. Similar to Osha’s statements, the Macquarie analyst justified his bullish stance on Tesla by citing the Silicon Valley-based electric car maker’s evident lead over competitors such as Porsche, particularly in terms of software and pricing. 

Porsche recently took the wraps off its first modern all-electric car, the Taycan, which is a formidable vehicle in its own right. Yet, despite its track capability and repeatable peak performance, the Taycan is weighed down by its price, which currently starts at around $150,000 for the Turbo version and about $185,000 for the Turbo S variant. This places the Taycan far above the Model S Performance’s ~$100,000 price, and closer to the next-generation Roadster’s $200,000 starting price.

Wall Street remains divided on TSLA stock. Among 27 analysts polled by TipRanks, eight currently hold a “Buy” rating, six maintain a “Hold” rating, and 14 have a “Sell” rating for the company. The average price target for TSLA shares among the analysts is $251.33, representing a potential upside of around 7% from recent levels.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

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