The sharp rise in Tesla shares in recent weeks has prompted an analyst to issue an urgent warning.
• Barclays analyst Dan Levy calls Tesla “the classic meme stock”
• The recent price increase is being fueled largely by private investors
• Levy uses Bitcoin as a benchmark
Tesla shares have gained around a third of their value on the NASDAQ over the three-month period. At last price of 413.26 US dollars, the share closed well above its 52-year low, which was marked at 212.11 US dollars.
How much meme stock is in Tesla?
For Dan Levy from Barclays, the significant share price increase in recent weeks is a reason to be reminded of the days of meme stocks. In 2020 and 2021, stocks such as GameStop and AMC recorded massive price increases, which was due to speculation by private investors rather than convincing business developments of the companies concerned.
Levy sees this criterion also met – at least partially – by Tesla: In an interview with CNBC, the analyst explained that much of the recent enthusiasm for Tesla shares comes from private investors who are looking forward to Tesla’s upcoming general meeting. While the expert acknowledges that the company has real value, he still describes the stock as “the classic meme stock” because its momentum is largely driven by hype and not just fundamentals.
Bitcoin used as a comparison variable
In this context, he also points out that Tesla shares often perform in ways that are inconsistent with traditional financial metrics. He considers the current price-earnings ratio to be “nonsensical”. He even suggests that Tesla shares should be viewed more in relation to Bitcoin than to other conventional stocks.
The hype surrounding the electric car manufacturer’s share certificate is also driven by the fact that Elon Musk has shifted its focus back to its own group. Musk has recently purchased more shares on the open market, and the compensation package proposed by the board is aimed at keeping him committed to the company’s growth. Against this background, Tesla is the “ultimate story stock” where current car sales are less important than investors’ big dreams.
Analysts are critical of the rally
Other analysts also appear to be rather critical of Tesla’s current price levels. At TipRanks, the average price target for Tesla shares is $362.94, around 12.23 percent below the current price level. The assessment of the share is correspondingly mixed: out of 36 analysts, 14 gave a buy rating, 13 recommend “holding” the share, and nine others even recommend selling.
Editorial team finanzen.net
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