After an extremely weak opening to 2016, the S&P 500 has bounced back a bit in the last couple of weeks. However, while many investors are celebrating the market rebound, some Wall Street analysts see the move as a great opportunity to sell or short popular tech stocks Tesla Motors (TSLA), GoPro (GPRO) and Twitter (TWTR).
According to these analysts’ price targets, each of these stocks has at least 25% downside from their current share price. Here’s a look at what the analysts have to say about these three :
Tesla (TSLA) Stock: 25% Downside
TSLA stock is already down 23% in the past six months, but UBS analyst Colin Langan still believes that shares are destined for around $140 in the next year. While the market cheered TSLA’s surprising core operational cash flow of $179 million in Q4, Langan points out that the company’s “net” cash flow on the quarter (including capex) was negative $232 million.
Despite a positive market reaction to the company’s shipment and margins projections for 2016, TSLA has now burned through more than $3.2 billion in cash in the past two years, and Tesla’s cash on hand declined from $1.4 billion in Q3 to below $1.2 billion in Q4. That cash burn suggests that a dreaded equity sale may be on the horizon at some point.
And when more Tesla shares hit the market, that means dilution.
UBS maintains its “Sell” rating on TSLA, and the firm’s $140 price target implies about 25% downside within the next year.
GoPro (GPRO) Stock: Is 40% Stumble Ahead?
GoPro stock is…
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