Shares of Tesla (TSLA -1.38%) ripped higher on Tuesday. The stock rose as much as 20%, adding more than $100 billion to the electric-car maker's market capitalization -- or about a Zoom Video Communications' worth of market cap. As of this writing, shares are up 19.2%.

Here's what's behind the massive move higher, as well as a look at whether this is a good time to buy the stock or not.

A bar chart with an arrow highlighting a rebounding trend

Image source: Getty Images.

Rebounding from a brutal beating

The stock's big gain on Tuesday follows painful decline in recent weeks. Between mid-February and yesterday, the stock had cratered more than 30%. This brought the stock's year-to-date return to negative 20%.

Tesla stock's pullback leading up to Tuesday has been mostly driven by broader-market dynamics. Specifically, growth stocks like Tesla have been getting hammered as the market's appetite for them took a breather after many tech and growth stocks rose much faster than the overall market in 2020.

But based on how most growth stocks are rebounding on Tuesday, the market generally seems convinced that the recent sell-off went too far.

Is this a buy signal?

It seems a few analysts agree that Tesla shares have become more attractive recently.

On Tuesday, New Street analyst Pierre Ferragu upgraded the stock from a neutral rating to a buy rating. In addition, he gave the stock a $900 12-month price target, noting that the company has clear catalysts in place to grow its deliveries meaningfully over the next two years, with annualized deliveries potentially quadrupling in three years. Ferragu also forecasts Tesla's annual earnings per share could grow to $12 by 2023 -- 50% higher than what the consensus analyst estimate currently calls for. 

Tesla vehicle production

Tesla factory. Image source: The Motley Fool.

Wedbush analyst Daniel Ives was similarly upbeat about Tesla stock on Tuesday. The analyst, who has a neutral rating on the stock and a $950 price target, said he believes the company has strong vehicle delivery momentum in China. 

Despite these analysts' optimistic remarks about the automaker, investors should keep in mind that the stock's valuation is still on the pricey side. For instance, the company's market capitalization is about 20 times its trailing-12-month sales -- even after the stock's recent pullback.

Of course, given the growth trajectory of Tesla's business, it's fair to say that shares should trade at a pricey valuation. Management, for instance, believes deliveries will increase from about 500,000 last year to more than 750,000 this year. Moreover, the consensus analyst forecast calls for annual revenue to increase from less than $32 billion in 2020 to $48 billion in 2021 and $63 billion in 2022.

And if electric vehicles continue growing in popularity, it's possible we will hit a tipping point in which most new vehicle buyers will want electric vehicles. Tesla, of course, would be positioned well to benefit from a vehicle revolution like this if it happens.

There's no telling if this is the bottom for Tesla stock. I'd argue that it likely isn't, simply due to the volatile nature of this growth stock. But one thing is clear: The stock is a much better deal than it was when shares reached an all-time high of more than $900 earlier this year.

While Tesla stock certainly isn't a bargain at this level, this could be a good time for investors willing to hold shares for years to initiate a small position in this growth stock.