Is this a buying opportunity for Tesla as it plunges over 12% to a new low?
Crisis is an opportunity. Researchers have found that whenever Tesla falls by at least 5% to a 6-month low, the stock will rebound strongly in the next 30 days! "100% success rate! Average return rate of 18%!"
Overnight, Tesla plunged more than 12%, marking the largest single-day decline in a year, wiping out $80 billion in market value. The closing price of $182.63 reached a new low since May 2023.
This also means that compared to the historical high of $414.5 set in 2021, Tesla's stock price has fallen by over 50%!
Should we give up or buy the dip? In the stock market, crisis may equal opportunity!
Researcher Jason Goepfert found that every time Tesla drops at least 5% to a 6-month low, the stock rebounds strongly within the next 30 days!
"A 100% success rate! An average return of 18%!"
Image source: @jasongoepfert
Zacks Investment Research further points out that Tesla's valuation is now at a low point: the current price-to-book ratio is 12.19, the lowest level since early 2020. The last time Tesla had such a low price-to-book ratio, the stock price soared from $35 to $400.
Meanwhile, Tesla's competitors in the industry also seem to be in a state of collapse: NIO, Rivian, and Lucid's stock prices have all fallen by over 90% from their historical highs.
More importantly, Tesla's cash flow remains stable, and the board of directors can choose to boost the stock price through share repurchases.