Shares of Tesla (TSLA) are around 4.25% to $ 286 in the midday trade Wednesday. The stock has been under pressure over the last few sessions, mainly due to an internal email indicating that fourth-quarter earnings are likely to come below third-quarter results.
While the quarter to quarter fluctuations are not the worst news in the world – at least Tesla rates profit now – it resulted in a 13% stock price slump. More importantly, however, the Tesla shares are below a key level as the 2019 convertible bonds come into force on 1 March. With a conversion price of $ 359.88, Tesla must meet the $ 920 million debt in cash if the share price falls below that mark after maturity.
The Tesla file has been weak due to this news. But it does not help that RBC analyst Joseph Spak reduced its price target and lowered its rating on Wednesday morning. The analyst is now considering Tesla as a lower price, down from market performance and has lowered its price target from $ 290 to $ 245. From Tuesday's closeness, it is nearly 20% down on the stock price.
Spak made points similar to Goldman Sachs analyst David Tamberrino, who released several negative arguments one day earlier and maintained its sales quality level and $ 225 price targets.
Spak notes that while Tesla produces 1
"The current valuation is already considering too high expectations," he added.
Spak recognized some of Tesla's latest moves – like lowering its car prices by $ 2,000 – as more realistic. Nevertheless, he argues that "the current valuation is already considering too high expectations."
Evaluation of Tesla Stock
There is no doubt that compared to other car manufacturers such as General Motors (GM), Ford (F), Fiat Chrysler), Daimler (DDAIF) and others, Tesla is trading at a very high valuation . But basing its valuation within six years from now seems to discount Tesla's future catalysts.
For example, what about model Y, Tesla Semi, Roadster, Model Y and Tesla Pickup? Even discount Solar Roof, what about Tesla Energy? There is also the company's autonomous driving software. You can argue that other automakers will have similar technology – like GM – but at the same time, we see valuations for the (GOOGL) (GOOGL) self-powered unit, Waymo, reaching $ 175 billion.  Investors can discuss the value of Tesla's autonomous entity, but it's certainly not zero. Same with its energy segment. Creating energy storage systems for municipalities and residential areas creates an efficient and independent energy system for customers. It creates value even though it is not the most talked about entity within the company.
I'm not saying that Spak necessarily overlooks some of this. Only much is hard to make protrusions so far, especially with a company like Tesla.
With regard to the stock price, a weekly seal during the 200-week moving average will be deterrent. However, a close below $ 250 level would be alarming. Particularly, if Tesla were to probe the latter levels, it would bring the stock price down near Spak's price target.
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