The shares of Tesla Motors Inc (NASDAQ:TSLA) are trading at their five-week low with current per share price of $229.30 and the shares of the electric car maker have declined by over 5% in the last 30 days. Some analysts are opined that low oil prices are driving the downward momentum whereas others consider it a temporary weakness.
The shares of the electric carmaker have lost up to 20% since September 4 when it was trading at an all-time-high of $286.04. The stocks of Tesla Motors Inc (NASDAQ:TSLA) have breached the 200-day low trading price twice and it is nearing the edge for the third time. Some analysts are holding low oil prices responsible for the drop in share prices but others have rejected dropping oil prices as an important factor.
Trip Chowdry, Global Equities Research, said that the only buyers affected by the drop in oil prices are the ones’ with price as the primary factor whereas buyers of Tesla car do not fall under that category. He added, “If you’re spending $100,000 on a car, you’re not price sensitive.” The expensive Model S from Tesla Motors Inc supports Chowdry’s comments (NASDAQ:TSLA).
Majority of the analysts are certain about the growth of the company considering its latest Model 3 with a price tag of $35,000 likely to come into the market in 2017. The electric carmaker is likely to boost its car sales’ much further by 2020.
As of now the shares of Tesla Motors Inc (NASDAQ:TSLA) are trading at $229.30 and the company has current market cap of $29.03 billion. The current market cap of the company and price to forward earnings ratio of 80 makes it an attractive “Buy” even with the current downward rally. The only affect that gasoline prices have had on Tesla is the increase in time when these valuations come true.
This article has been written by Prakash Pandey.