Tesla Stock May Need To Recharge: Analyst Says Elon Musk-Led Company Faces 25% Hit On Earnings

Loup Funds' Gene Munster has his sights set on some short-term speed bumps that could impact Tesla Inc TSLA stock over the next few months.

"I think there is going to be some earnings pressure on this based on some of the discounting that has happened," Munster said Tuesday on CNBC's "Squawk Box."

What To Know: The turn of the calendar hasn't stopped Tesla from cutting prices on its vehicles. The Elon Musk-led company slashed prices in China again last week, and this time some of the discounts extend beyond 13%. 

Tesla shares were down nearly 50% over the last three months, due in large part to investor concerns that price cuts are a sign of fundamental challenges for the EV company. This aggressive series of discounting is likely to negatively impact earnings, so Munster plans to continue waiting on the sidelines despite believing shares have fallen too far. 

"I'm a long-term believer in Tesla. I think that the shares are undervalued. Near-term, I would be cautious," Munster said.

Related Link: Tesla Spikes Higher But Can The EV-Giant Negate This Long-Term Trend?

Munster's Thesis: Tesla is due to report earnings at the end of the month, but Munster told CNBC most of the price cuts will be recognized in Tesla's March quarter.

"We want to own it in our funds. We don't own it yet because we want to optimize that opportunity," Munster said.

Tesla updates investors with production and delivery numbers on a monthly basis, so those results shouldn't come as a surprise, but earnings are likely to take a hit from the price cuts, Munster said. 

The latest cuts in China are expected to negatively impact the company's March quarter by 15%, he said, adding any further cuts will increase the impact.

"Investors should generally expect a 25% haircut to the March earnings," Munster said.

Ultimately, Loup was positive about Tesla's longer term. Munster suggested the firm could take a position in Tesla at some point in 2023, but reiterated that he anticipated further pressure to the downside in the near term.

Check This Out: Tesla's Price Cuts In China Stoke Demand — 10,000 Units Delivered In One Day, Says Report

TSLA Price Action: Tesla has a 52-week high of $384.29 and a 52-week low of $101.81.

Tesla shares were down 0.77% at $118.585 Tuesday at the close, according to Benzinga Pro.

Photo: Courtesy of Tesla.