$1,000 Invested In Beaten-Down Tesla Stock Now Will Be Worth This Much If It Returns To All-Time Highs

Tesla Inc. TSLA stock has lost much of its sheen and is trading at an extremely cheap valuation. The stock is trading at 29.59 times the multiple of its forward earnings estimate and 46.46 times its trailing 12-month earnings.

Tesla, Down But Not Out: After peaking at $414.50 on Nov. 4, 2021, Tesla stock slumped 36.3% in the first half of the year, with the predicament blamed on market-wide and industry-specific factors, including fears concerning higher interest rates as well as production and supply chain challenges.

See Also: How to Invest In Tesla (TSLA) stock

With only a few trading sessions to go for the year-end, the stock is down a steeper 61%, the second biggest worst-performing mega-cap stock after Meta Platforms Inc. META.

Chart via Benzinga Pro

Macro and Fed did play a part in the intensification of the sell-off in the second half of the year, as CEO Elon Musk would like to point out. Another key reason for the negative sentiment is demand weakness in China, a vital cog in Tesla’s growth story.

Is Tesla Missing A Trick? Future Fund’s Gary Black has asserted that Tesla might be missing a trick by not having an electric vehicle at a $30,000 price point in China. He loves to point out that Warren Buffett-backed BYD Manufacturing Company Limited’s BYDDF BYDDY outperformance is primarily due to its budget EVs.

Over and above these, Tesla bulls say that Musk has proved to be Tesla’s undoing through his acquisition of Twitter and his preoccupation with the platform since buying it in October. In the process, the billionaire has done damage to the Tesla brand, bulls say. Calls for Musk to find a CEO for Twitter and return to Tesla have been growing louder.

Elon Musk Unmoved: Even amid the criticisms, Musk seems to be unmoved. He now rarely tweets about Tesla or plans for the company. It could be that he is more than convinced about the company’s ability to survive past the challenges and grow.

Tesla, although has lost share to nimble EV startups and legacy automakers transitioning to EVs, is still the leader of the electric vehicles race. Its Model 3 and Model Y vehicles command a significant mindshare among customers. Tesla recently launched its Semi EV and is on track to unveil the Cybertruck in the upcoming year. Its non-EV businesses are also well-positioned to grow.

The China production risks could, to some extent, mitigate as the company’s newest Gigafactories in Berlin and Texas ramp up. The company is also expected to benefit from the U.S. EV credit allowed under President Joe Biden’s Infrastructure Bill that is to be made available in the new year.

A buyback by Tesla could stem a near-term slide, analysts, including Black, opine.

Tesla Holds Out Promise: Provided the stock can stem the slide and turn around, Tesla loyalists who stayed with the stock even amid the troubled times could be in for a rich haul.

A $1,000 invested in Tesla stock at Tuesday’s closing price would fetch 7.3 Tesla shares. If the stock reverses course and reclaims its Nov. 4 high of $414.50, the same shares would be worth $3,008, a neat 200% return.

The consensus price target for Tesla stock even after all recent rerating is $279.41, according to TipRanks, suggesting over 100% upside potential.

Price Action: Tesla shares closed Tuesday’s session at $137.80, down 8.05%, according to Benzinga Pro data.

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