Shares of the Palo-Alto-based automaker were down about 5% in early trading on Thursday, which had initially set up the Elon Musk-led company for its lowest open since early December 2016 before reversing trajectory shortly before the open.
Still, numerous analysts caution investors of a potential bear case for the company.
According to FactSet, 16 analysts have cut price targets in the past month, with a smattering of analysts downgrading the stock as well. The momentum on the stock has clearly inverted from its typical pattern as bullish investors lose their nerve.
"With fundamentals deteriorating, specifically deliveries/production that are starting to stall as well as losses/cash burn that are not turning a corner on a sustainable basis, some of these optimists now appear to be taking a much more pessimistic stance, with the stock breaking down in recent days," Bank of America analyst John Murphy noted.
He retained his "Underperform" rating as concerns remain about the company's long-term prospects and the continued erosion of share value.
"Tesla may now find itself in a cycle where a lower share price may itself contribute to a potential deterioration of employee morale as well as potentially increased counterparty risk with both customers and business partners (suppliers, governments)... potentially further impacting fundamentals," Morgan Stanley analyst Adam Jonas wrote in a note to clients on Tuesday.
He set his "Bear case" price target at a paltry $10 per share amid the risks and the emerging "distressed credit story" that is overshadowing what had long been a growth narrative.
For more on what to expect and if the company can shift the negative narrative surrounding the stock, check out Real Money's Stock of the Day analysis.