Tesla could eventually become the next Apple or Amazon in the automobile industry, but until then, the stock is likely to remain range bound, according to AllianceBernstein analyst Toni Sacconaghi, who initiated the name with a market perform rating Thursday.
"We have seen this pattern play out before (with AAPL, NFLX, AMZN), where a single company triggers a sea change in outlook among consumers and, eventually, among traditional incumbents, who further validate the shift," Sacconaghi wrote in a research note.
In the long term, he predicts Tesla is best-positioned to retain a large portion of the electric vehicle market given its leading battery technology, strong brand awareness and overall business model.
"Our experience is that consumer technology disruptions occur much more quickly than is typically expected. We believe that EVs [electric vehicles] could be 40 percent of the auto market in 20 years and over 50 percent by 2050," Sacconaghi said.
In the near term, however, the analyst is cautious on Tesla as the automaker fine tunes its concept and business strategy.