In an analyst note, the firm slashed its 2015 EPS estimates for the electric automaker 44 percent, to $2.39 per share from $4.39, citing delayed and reduced delivery expectations for the company's new Model X vehicle.
(Watch: Morgan Stanley slashes Tesla outlook)
But Wednesday's selloff was just a bump in the road for Tesla, whose stock seems to go in one direction, up. Shares of the company have risen nearly 100 percent in just 12 months.
And according to one technician, a small pullback is just what the stock needs to propel it to all-time highs in the coming months.
"[Tesla] has had a massive run over the past couple of years, but the way in which it's done so has been pretty orderly, which keeps it intact and keeps it from getting too frothy," said MKM Partners' chief market technician Jonathan Krinsky.
Krinsky pointed out that Tesla has seen three methodical pullbacks in the past year, each finding support at the stock's rising 200-day moving average. "Despite the weakness here, the orderly pullback makes it attractive on a buy entry," Krinsky added. "We look for a move up to the $300 [per share] level."
A $300 per share target on Tesla would mean the stock has to rally another 21 percent from current levels, possible, but not without tremendous volatility, said David Whiston, senior analyst at Morningstar.
"There's going to be a lot of volatility owning Tesla, and I think it's just a matter if [investors] are comfortable dealing with the risk of a company that is still quite young and will be growing immensely," said Whiston, who explained that while Tesla is a tech company, it still makes cars, which is highly capital intensive and cyclical. "There's still going to be a lot of unknowns with this name going forward, but the growth runway is still tremendous both overseas and in the U.S."
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