TSLA Trades About 20% Below Fair Value, Says Analyst — But Retail Stays Bearish Amid Cybercab Scrutiny, SpaceX Merger Buzz

Strategist Dave Sekera said Tesla’s “pendulum” swings create opportunities for traders while long-term holders can keep “some dry powder” to buy selloffs.

• Morningstar estimates TSLA trades 19% below fair value, though it rates the stock “Very High Uncertainty.”
• Wolfe Research maintained its “peer perform” rating, citing AI and autonomy progress and an “increasingly attractive setup into 2027.”
• NHTSA gave Tesla until Sept. 30 to answer 21 questions about how its steering-wheel and pedal-free Cybercab complies with safety standards.

Shares of Tesla, Inc. (TSLA) trade 19% below Morningstar’s fair-value estimate, making the EV maker a stock pick despite “Very High Uncertainty” around its emerging businesses.

TSLA stock rose more than 2% on Thursday to close at $366.20, putting it on track for its third straight weekly gain. 

Tesla’s ‘Pendulum’ Swings Create Buying Opportunities 

Morningstar Chief U.S. Market Strategist Dave Sekera said that Tesla recently moved from four-star to three-star territory as its share price rose. The firm gives Tesla a narrow economic moat based on its cost advantages and intangible assets.

Sekera said Tesla could be a “rent or own” stock, telling investors, “I think it can be both, and I think it’s really just going to depend on the individual preference of the investor and whether or not I call them a ‘true believer’ in Elon Musk.”

Tesla has “traded enough like a pendulum,” he said, creating opportunities to buy after sharp selloffs and take profits when shares run too far. Long-term investors could maintain a core position while keeping “some dry powder” to add during weakness. The analyst, however, cautioned that Tesla’s valuation depends on high growth from several business lines whose products remain under development and, in some cases, are not yet being sold. 

Additionally, Wolfe Research reiterated its “peer perform” rating, saying Tesla’s AI and autonomous-driving progress is the stock’s primary catalyst. “Progress on key AI / Autonomy initiatives remains the key driver of the stock, with an increasingly attractive setup into 2027,” the firm said.

Regulators Scrutinize Tesla Cybercab

Meanwhile, Tesla’s Cybercab ambitions face a key regulatory test, with the National Highway Traffic Safety Administration (NHTSA) giving the company until Sept. 30 to answer 21 questions about how the vehicle complies with safety standards without an exemption.

The two-seat robotaxi, which has no steering wheel, pedals, or mirrors, currently operates only in limited parts of Austin through Tesla’s Robotaxi app. NHTSA is seeking details about its controls, braking, turn signals, mirrors, rear visibility, and fleet-expansion plans.

Musk has called Cybercab “the first car that is specifically built for unsupervised full self-driving,” while Tesla has promised a “first-class experience at coach price.”

Tesla-SpaceX Merger Talks Return To Spotlight 

Speculation over a potential Tesla-SpaceX merger returned to focus after billionaire investor Ron Baron said he had presented Musk with arguments both for and against combining the companies, and would support whatever he decides. “I’m not someone who makes the decision. You’re the guy,” Baron recalled telling Musk. “Whatever you decide is better is what I’m going to support.”

Musk had also fueled the speculation recently at the All-In Summit when asked why Tesla and SpaceX remain separate despite their growing ties. “With all this collaboration, on so many levels, who can imagine what action one might take when there’s so much close collaboration in so many areas,” he said, without confirming a deal.

Baron Capital held about $25 billion in SpaceX and more than $5 billion in Tesla at the end of June. While Baron called Tesla a buy, he ruled out adding to his exposure: “I have $30 billion invested… That’s enough.”

How Do Retail Traders Feel About TSLA?

On Stocktwits, retail sentiment for TSLA slipped to ‘extremely bearish’ from ‘bearish’ levels a week ago amid ‘normal’ message volume. Although message volume has dipped significantly over the past week, it has more than doubled over the past 30 days, indicating strong interest in the platform's most-followed stock.

One user said, “$TSLA everybody’s watching how it always crashes back down the next day so they’re all loading up on puts watch this time it will continue lol.”

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Another user said, “$TSLA reclaimed the 21ma . As long as we close above it we can see continuation tomorrow. $367.25 ..... big spot to hold.”

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So far this year, Tesla's stock has lagged its "Magnificent Seven" peers, making it the group's worst performer, down 19%. 

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