Tesla (TSLA) Recovery May Start Now as Oppenheimer Declares it a “Triple Play”

If Tesla (NASDAQ: TSLA) were a car—instead of just being a car maker—it would be one that many would likely be leery of riding in ever again. It started out like a nice, smooth ride, picking up speed, rolling along well. It was just about to slide safely into the S&P 500 Memorial Rest Stop when it hit a patch of bad road known as the coronavirus. However, there are some eager to get back behind the wheel of the great Tesla brand, including Oppenheimer, who recently declared it a “triple play”.

The Long, Strange, Recent History of Tesla

For a while, Tesla was the darling of the NASDAQ, and its ability to actually do wrong was greatly in question. When the coronavirus hit, though, that's when Murphy asserted itself and everything that could go wrong did, and frantically.

Tesla lost its Chinese production operations and its Chinese market in just about the same day, as factories and storefronts alike were shuttered by government mandate. This hamstrung the company's efforts at expansion and further profitability as it was counting on the Chinese market not just for supply, but also for newfound demand. It had made great inroads in North America and Europe already, but this demand was beginning to slow, and it needed the Chinese buyer to help keep it running at the speeds it had seen for months prior.

The loss of China in pretty much every sense sent Tesla shares careening downward, and the already-volatile stock lost over half its value in just one month, from February 19 to March 18.

Covering All the Bases to Make a “Triple Play”

So that's where we are today, when Oppenheimer walked in the room and declared Tesla a “triple play”,  which is a strange designation for a stock to have. However, this one has a sound basis behind it: a “triple play,” reports note, is where a stock meets three criteria.

One, it has a positive trend going for it, a reasonably steady path in a positive direction. Two, it has a basic rating of “outperform”. Three, it has the support of “top-down” market movement overall.

Stocks that meet all three of these points at once are declared “triple plays” by Oppenheimer, and are thus somewhat attractive buys depending on how much weight one puts behind Oppenheimer assessments.

Breaking Down the Inside Baseball

These are actually all points that describe Tesla's recent performance in the field; Tesla shares have been on an upward track since March, and especially lately. The stock hit lows not seen since its massive run-up which started in mid-December 2019, hitting its lowest price of the year on March 18 at $361.22. Since then, the stock has gone mostly upward—a brief plateau hit March 19 to March 23, and a couple small dips happened between then and now—to hit its current level of $597.80 as of this writing.

With several analysts, including Colin Rusch, kicking in ratings in the “outperform” range, that last point helps cement Tesla's stance in the “triple play” field.

Rounding Third, But Can It Beat the Throw?

Things are looking much better at Tesla now, and with good reason. It's certainly made quite a bit of recovery, and as we finally get out of this COVID-19 funk and get back into the economy, Tesla's recovery might well carry on. Certainly, the restarting already seen in China can't hurt, especially since Tesla was already counting on China to give it the upswing it needed two months ago to get it into the S&P 500.

However, there are problems here; one, Tesla needs Chinese recovery to continue in order to produce and sell. Right now, that's not a foregone conclusion. Any relapse on China's part will likely cripple the Tesla recovery, especially as the rest of the world finds its own conditions temporarily straightened by a combination of lockdown and collapsing job market.

There are a lot of moving parts contained within Tesla's rebound, and all of these parts are going to have to continue carrying on in order to get Tesla back to where it was just three months ago. While things are certainly looking brighter right now, there are more than shadows sufficient lurking about to dull Tesla's attractiveness in the market.