Tesla (NASDAQ: TSLA) stock price rebounded 6% in Wednesday trading after reporting the largest one day drop in Tuesday trading. Shares of the world’s largest electric vehicle company lost upside momentum after Tesla failed to make the S&P 500 index as part of the September quarterly rebalancing.
Tesla stock price plunged 21% in Tuesday trading and shares are down more than 30% in the last five days alone. The market selloff is also blamed on lofty valuations. Tesla stock price soared dramatically by 300% since the beginning of this year, extending the twelve months gains to 625%.
“The profitability metrics and forecast likely was the swaying factor that might have excluded Tesla this time around. In a nutshell, Tesla not getting into the S&P 500 will be a head-scratcher to the bulls that viewed this as virtually a lock given all the parameters met,” notes Wedbush Securities analyst Dan Ives.
The market analysts have also dropped the Tesla stock price target. For instance, Bernstein stood among the bears as the firm expects further downside for Tesla shares in the days ahead. The firm has provided an Underweight rating amid lofty valuation. The average price target from Wall Street analysts stands at $296.79, indicating more downside from the current level of $330.
Tesla stock price has hit an all-time high of $500 at the end of the last month. The shares are in correction territory since the beginning of this month.
The market analysts and investors have aggressively been waiting for a highly-anticipated Battery Day event that is scheduled on September 22. The forecasts and commentary related to future fundamentals would play a big role in the future price movement.
Tesla also plans to introduce new vehicle designs. The company has also been aggressively working on improving its production potential and deliveries.
Elon Musk last week said that the new European Gigafactory is likely to have special features. “It will be the first time that there will be a transformation in the core structural design of the vehicle. It’s quite a big thing. Both manufacturing, engineering and design as well,” Musk said.