When you think about Tesla Motors (Nasdaq: TSLA), do you consider it an auto company or a tech company?
If you're having a tough time choosing, you're not alone. A lot of investors and analysts are getting tripped up by Tesla's unusual hybrid nature as a maker of innovative electric cars.
Analysts who cover the company are all over the map, with price targets ranging from a high of $325 to a low of $75. Tesla stock is currently trading at just under $200, down about 20% from highs it hit in early March.
Recommendations are split as well, with three analysts calling TSLA a strong buy, three calling the stock a buy, six calling it a hold, and one expecting Tesla to underperform.
"There is no strong consensus here, and that contributes to its volatility," Andy Busch, editor of the Busch Update, told CNBC. "Is it an auto company or a technology company? All we really know is that it's the poster child for momentum."
It's important to figure out what kind of company Tesla is because it drastically affects how you calculate its valuation. If Tesla is an auto company, it's greatly overvalued right now. But if it's a pioneering tech company, its current valuation is in the ballpark.
The confusion in large part explains the wild ride Tesla stock has been on over the past year. TSLA is up 337% since last April, but along the way has seen two major pullbacks.
The war between the TSLA bulls and TSLA bears has been intense, with the bulls winning most of the time.
But the bears haven't given up. Despite getting hammered repeatedly when TSLA stock goes on another big upside run, Tesla's army of skeptics has been heavily shorting the stock lately.
In fact, according to research firm Markit Economics, TSLA is currently the most shorted stock in the Nasdaq 100. Nearly a third, 29.47%, of the TSLA float is short.
But the short-sellers of Tesla stock might find themselves taking yet another hit before long…
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.