When Goldman Sachs talks, investors listen.
Goldman analyst Patrick Archambault, who covers Tesla, put out a report with a price target on the stock of $84, a 34 percent discount to the prior day close of $127.26. Archambault had come up with three scenarios for the company, based on how many cars it would sell, market share and operating margin. The bull case for the stock had the company reaching 3.5 percent global market share in two categories and 15.2 percent operating margin, but even so the stock would only be worth $113 a share.
More than five years later, Tesla’s operating margin is just a little over 6 percent, but the stock has soared nonetheless. And investors quickly found a buying opportunity after the sell-off from the Goldman report, pushing the stock up 10 percent the next day.