Tesla shares are down over 10% since the announcement of second-quarter results. This dip in the stock raises the question is this the right time to buy Tesla? Global Equities Research analyst Trip Chowdhry believes the answer is yes.

Tesla Motors Inc Stock A Good Buy: Chowdhry

Tesla equity offering, positive for stock

After the recent decline, Tesla stock saw some positive movement last week following the company’s $500 million secondary offering. The rally continued the next day also, with Tesla closing on Friday at $243.15.

Chowdhry believes the decision from Tesla to raise capital from an equity sale will help the EV firm with its upcoming projects. From the original 2.1 million secondary offering, the company raised the offering to 2.7 million shares, which will help the firm to raise around $640 million in capital. Of the total offering, Tesla CEO Elon Musk will buy $20 million worth of stock to build investor confidence.

It is generally seen that when a company issues ordinary shares, concerns over the stock dilution leads to a decline in the stock price. But, in case of Tesla, a jump in the stock price was seen, which is mainly because analysts are more concerned over Tesla’s cash burn rate rather than stock dilution. Owing to such sentiments, Chowdhry rated Tesla as Overweight and put a price target of $385 on shares. Though the analyst believes the stock to be a buy, he warns thst shares “will continue to be volatile, with an upward bias.”

Chowdhry notes that the current price level is a “good entry point” for the investors, who are still cautious on the stock.

Autonomous driving technology to push stock up going forward

Separately, Tesla enjoyed a big price target jump from Morgan Stanley analysts, who are bullish on the EV maker’s autonomous driving technology. Morgan Stanley raised the price target from $280 per share to $465 per share.

Morgan Stanley notes that autonomous driving will boost the number of miles driven per year, and this will help drivers to recover the up-front premium paid for EV’s faster than the traditional cars

Though the analysts believe Tesla would make an announcement regarding their entry into the shared mobility space by the next year or the beginning of 2017, the service won’t be fully developed until 2018. The service could also “more than triple Tesla’s potential revenues by 2029, … selling miles in addition to selling cars.”