Tesla Stock Price Will Shrug Off Today’s 5% Dip and Continue Higher

The Tesla stock price was down nearly 5% today to $272.51, following yesterday's statement from Chief Executive Officer Elon Musk that Tesla Motors Inc. (Nasdaq: TSLA) shares are overvalued at the moment.

"I do think people sometimes get carried away with our stock," Musk said on CNBC yesterday. "I think our stock price is kind of high right now, to be totally honest. Or rather, let me put it to you this way: If you care about the long-term of Tesla, I think the stock is a good price. If you're looking at the short-term, it's less clear."

tesla stock priceMusk has made similar statements before. In October, when shares were near $170, he told Bloomberg that the Tesla stock price "was more than we deserve."

TSLA stock had been trading at an all-time high of $291.42 this week after the company announced that it will be building the Tesla Gigafactory in Nevada.

The Gigafactory will cost roughly $5 billion to build and is expected to revolutionize lithium-ion battery production. The plant will cover approximately 5 million square feet and will employ around 6,500 people.

Tesla wants to break ground on the Gigafactory within the year and complete construction by 2017. The company is hoping to reach maximum output capacity by 2020, at which point the facility will supply power for more than 500,000 vehicles annually.

According to the Reno Gazette-Journal, the state of Nevada has offered Tesla a package worth $1.25 billion over the next 20 years. Approximately $725 million of the deal is in a 20-year, 100% tax abatement. There is also a $332 million 10-year, 100% property tax abatement, and $120 million in transferable tax credits.

If anything, today's 5% drop is a blip on the radar. The Tesla Gigafactory news was the biggest story of the week, even if Musk's comments sent shares lower. TSLA shares are still up 16% in the last month and 83% in 2014.

Importantly, Musk said that he believes that short term the price may be high, but long term the stock has great potential.

Analysts at Stifel Nicolaus echoed those thoughts earlier this week when they placed a $400 price target on TSLA shares. And they aren't the only ones bullish on TSLA stock.

Money Morning's Chief Investment Strategist Keith Fitz-Gerald shares a similar sentiment. According to him, the Tesla stock price is going to climb much higher in the next year...

Tesla Stock Price Headed Much Higher in 2015

"I believe TSLA stock will double within the next 12 months," Fitz-Gerald said. "This company is on track to see a stock explosion that will make its surge back in the spring of 2013 look like a speed bump."

Fitz-Gerald made that prediction on Aug. 19, and TSLA stock is already up more than 6% in that short time.

And according to Fitz-Gerald, one of the biggest catalysts that will continue drive the stock through 2015 is the Tesla Gigafactory.

"The announced plans for what Tesla is calling a Gigafactory mean that the company is pouring resources into slashing battery costs like never before," he said. "This 10 million square-foot factory will have a price tag of $5 billion... hefty, you might say, for a company whose earnings were less than half that in 2013."

"But the juice is worth the squeeze. That's because the Gigafactory will be a pioneer in mass production of cost-effective and high-quality battery packs that will give Tesla an even deeper competitive edge over its competitors going forward. It's going to be the largest lithium-ion battery manufacturing plant in the world."

But the Tesla Gigafactory isn't the only reason why Fitz-Gerald loves TSLA stock long term. Find out the other catalysts driving TSLA's profits, as well as a way to play TSLA at a fraction of its $272 per share cost...

Join the conversation on Twitter @moneymorning and @KyleAndersonMM using #Tesla

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