Tesla Stock Price: Recent 14% Drop Means Time to Buy By Kyle Anderson

The Tesla stock price was trading at $252 per share today, a 14% drop from the all-time high of $291.42 that it hit less than three weeks ago on Sept. 4.

And while that has many investors worried about the direction of the Tesla Motors Inc. (Nasdaq: TSLA) stock price, this recent pullback has actually created an excellent buying opportunity for those looking to get a piece of TSLA.  

First, a look at what pushed TSLA down recently...

Tesla Motors stock dropped 9.1% on Sept. 15 after analysts from Morgan Stanley (NYSE: MS) cautioned investors, writing "do not expect the stock to appreciate so consistently and one-directionally from here."

Monday, analysts from JPMorgan Chase & Co. (NYSE: JPM) issued a similar warning saying that the company's stock is overvalued based on the number of vehicles it will be delivering in the fourth quarter of 2015.

But the case with TSLA stock has always been the company's long-term potential.

As we've been telling you for months at Money Morning, TSLA's short-term performance will be volatile. The stock moves more drastically than others depending on day-to-day news stories. That's because Tesla is a leader in the electric-vehicle industry, which is viewed as revolutionary by supporters and as impractical by detractors. When news breaks that supports either side of the argument, the stock sees huge price swings.

Instead, Tesla stock is a great long-term play for investors with the time and patience to wait for the company's massive plans to be realized. According to Money Morning's Chief Investment Strategist Keith Fitz-Gerald, there are two major reasons the Tesla stock price will climb dramatically in the months and years to come...

The first reason Fitz-Gerald is bullish on TSLA stock is the company's new Gigafactory.

Earlier this month, Chief Executive Officer Elon Musk announced that the massive battery plant will be built in Nevada, and the company will be receiving $1.3 billion in tax breaks from the state through a comprehensive tax incentive package.

Tesla's current timeline calls for construction to begin on the Gigafactory by the end of 2014. The plant is expected to be operational by 2017, and reach maximum output capacity by 2020. The final goal for the Tesla Gigafactory is to be able to supply power for more than 500,000 vehicles annually.

"The announced plans for what Tesla is calling a Gigafactory mean that the company is pouring resources into slashing battery costs like never before," Fitz-Gerald said. "This 10 million square-foot factory will have a price tag of $5 billion... hefty, you might say, for a company whose earnings were less than half that in 2013."

"But the juice is worth the squeeze. That's because the Gigafactory will be a pioneer in mass production of cost-effective and high-quality battery packs that will give Tesla an even deeper competitive edge over its competitors going forward. It's going to be the largest lithium-ion battery manufacturing plant in the world."

But the Gigafactory won't be the main driver of the Tesla stock price from here...

Fitz-Gerald is also a big believer in the man running Tesla Motors, Elon Musk.

"You hardly ever see this recognized in the mainstream media, but Tesla has one irreplaceable asset that also happens to be its greatest advantage over its competitors," Fitz-Gerald said. "The company has been blessed with the most innovative CEO on the planet: Elon Musk."

"Creativity as a thinker who can't be boxed in by entrenched competitors, the ability to cheerfully put tens of millions of his own money behind his vision when necessary, a solid grasp of what technology means for the industry he operates in... all of these are great qualities in a CEO. Any company, big or small, is lucky to have a chief executive with just two of them. Tesla has all three in Elon Musk."

Despite the Tesla stock price's dip in the past month, TSLA is still up 67% in 2014, and 655% since the start of 2013.

Other research groups are backing the long-term potential of TSLA as well. Global Equity Research has a 12- to 18-month price target of $385 on Tesla. ISI Group holds a "Buy" rating and a target of $320. Stifel Nicolaus is the most bullish of all, with a target of $400 for the Tesla stock price.

"This company is on track to see a stock explosion that will make its surge back in the spring of 2013 look like a speed bump," Fitz-Gerald said.

The key is to view TSLA stock as a long-term investment, and ignore the day-to-day noise that can often bombard investors.

Editor's Note: The only drawback for TSLA stock is the $250 price tag that comes along with it. But Fitz-Gerald has found a way for investors to profit from Tesla's massive potential, at a fraction of that $250 per share cost. Here's how...