The stock price has dropped almost 12% since the start of the year. A profitable quarter and massive increase in production could re-focus the Tesla narrative around the company's rapid production growth and improving financial prospects.
Separately, the electric vehicle maker is dropping two of the seven standard colors it had offered to customers as it tries to streamline production.More news: New Update On Injury To Titans QB Marcus Mariota
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But Sacconaghi said the company remained on track to meet key auto manufacturing targets in the third quarter and predicted shares would return to their historic range as the aborted go-private campaign becomes a more distant memory. In the past year and a half, "retreats in the stock below $300 per share have usually presented attractive near-term entry points, and we suspect the same may be the case following last week's turmoil". Tesla shares have lost over 25 percent of their value since early August in the immediate wake of Musk's "funding secured" tweet. The company said in its second-quarter earnings letter this year that it expects to post consistent profits starting in the third quarter, and the high-end Model 3s generate better margins than the base model would.
Tesla's decline has been driven by accelerating "management credibility issues", a Needham & Co. analyst wrote in a report on Monday put an "under-perform" rating on Tesla. Chief Accounting Officer Dave Morton announced Friday that he would be leaving the company after just one month on the job, citing "the level of public attention placed on the company".
The former employee said Musk's prediction that production and deliveries will more than double was realistic and one current employee said Musk's optimism was reflected among the employee's colleagues. Tesla stock is up 5.4% in Monday morning trading following Musk's latest comments and after a Baird analyst reiterated his bullish stance. Analysts say Tesla may struggle to raise cash until the dark cloud of an SEC investigation is lifted.
The $35,000 Model 3 will reach new customers for Tesla, some of whom won't own multiple vehicles.