No one could ignore Tesla's price drop during afternoon trading session, as the stock fell to $247.85, logging a -2.0% underperformance of the S&P 500. The stock is still trading within range of its average target price of $239.82, which may prove to be a resistance point to further declines. Analysts have given the Auto Manufacturers stock target prices ranging from 24.33 to 350.0 dollars per share, with an average rating of hold.
The market sentiment on the stock is decidedly optimistic, since Tesla has a short interest of only 3.0%. This is the percentage of the share float that is being shorted. Each short position represents an investor's expectation that the price of the stock will decrease in the future.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
We can make inferences about the market sentiment surrounding Tesla by analyzing its rate of institutional ownership. If institutions such as hedge funds and pension funds are the primary shareholders of a corporation, it most likely means that its shares are a good investment according to those institutions' analysts.
At 44.2%, the rate of institutional ownership is average, indicating that a sufficient number of institutions have concluded that it is a stable investment. Beware, however, that the rate of institutional ownership could also indicate an ongoing proxy battle or takeover attempt -- so you should also periodically check the news about a stock whose institutional ownership you are tracking.
Overall, there is mixed market sentiment towards Tesla because of an analyst consensus of little upside potential, a hold rating, an average amount of shares sold short, and only a small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.
At a glance, here are some essential statistics you may want to know about TSLA:
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It has trailing 12 month earnings per share (EPS) of $3.33 per share
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Tesla has a trailing 12 month Price to Earnings (P/E) ratio of 74.4 while the S&P 500 average is 15.97
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The company has a Price to Book (P/B) ratio of 15.39 in contrast to the S&P 500's average ratio of 2.95
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Tesla is a Consumer Discretionary company, and the sector average P/E and P/B ratios are 22.33 and 3.12 respectively
