Tesla has gotten to a point where the organization is already “much larger ” compared to its CEO, Elon Musk, according to Wall Street analyst Philippe Houchois. The Jefferies analyst pointed out that while Elon Musk remains the surface of the electric car manufacturer, the company itself was demonstrating its critics wrong by becoming a feat that has been deemed next to impossible by skeptics.
“Tesla at this stage is bigger than Musk. Needless to say, Musk gets a whole lot of attention. But Tesla has managed to be profitable, in a level of product and pricing that nobody expected to generate money,” the Jefferies analyst said.
Houchois also expressed his support for the company’s decision to shift its entire sales strategy on the internet. Along with the launch of the $35,000 Model 3, Tesla announced that it will be closing a significant number of its physical stores in favor of an online-only revenue model. This allows the company to sell its electric cars in all countries across the US, but it will lead to layoffs across its staff.
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These changes haven’t been received kindly by Wall Street. Barclays analyst Brian Johnson mocked the company’s strategy, calling it an “un-iPhone” moment. The Jefferies analyst begs to differ. Explaining his point, Houchois noted that Tesla is ahead plan.
“Every carmaker dreams about the ability to sell cars online. They are currently implementing a variety of developments that other carmakers are thinking about or fretting about,” Houchois stated.
The Jefferies analyst noted that in the long term, he hopes that Tesla can grow and reevaluate its balance sheet, allowing the company to grow. If the electric car maker can accomplish this, Houchois considers that Tesla can reach a level where it can efficiently be self-funded.
Tesla stocks (NASDAQ:TSLA) fell almost 8 percent on Friday after the company’s announcement of its online-only sales model. On Monday, the company’s stock continued its dip, dropping up to 3%. Despite these dips, JMP analyst Joseph Osha maintained his Outperform rating and his $406 price target for TSLA inventory, implying a upside from current levels.
As of writing, Tesla is down 3.39percent at $284.80 per share.
Disclosure: I don’t have any ownership in shares of TSLA and don’t have any plans to initiate any places.
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