Generally speaking, one of the most important duties for a CEO is to act as the brand of the company he or she is leading. After all, if the CEO does not live and breathe the organization's corporate values, what incentive do employees have to do the same?

Not too long ago, corporations would spend millions, if not billions, of dollars to get their name on a stadium or act as a sponsor. However, the advent of social media has completely redefined what "brand" means and how a company is perceived in the public eye.

One of the pioneers who recognized this shift is Elon Musk. While Musk is well known as a founder of spaceship company SpaceX and tunnel transit company Boring, he is perhaps best known as the face of electronic vehicle (EV) maker Tesla (TSLA -1.92%). Over the last several years, Tesla has built one of the most recognizable brands in the world. Despite the underlying technology employed in its batteries, it would be short-sighted to discount Musk's popularity in Tesla's growth. 

Unfortunately, it seems as though the rocket ship that is Tesla may soon be headed back to Earth. Earlier in 2022, Musk made a bid to acquire social networking company Twitter. In October, he finalized the deal and took Twitter private. Over the last several weeks, Musk has acted as CEO at Twitter, and thus has been spending less time on Tesla. Many on Wall Street have seen enough, and several research analysts have cut their price targets on Tesla.

While it is important to understand what is going on at Twitter and how it may be impacting Tesla's stock price, there are reasons to believe that now is a great opportunity to buy the stock for the long-term.

More drama than a schoolyard scuffle 

When Musk took the helm at Twitter, he vowed to restore public faith in the social media company by investigating specific features within the algorithm, and why certain stories or specific accounts receive more scrutiny than others. Although this idea was initially applauded, few asked how Musk was going to actually do this.

The first thing he needed to do was actually buy Twitter, which he funded by selling a portion of his Tesla equity. In effect, by offloading billions of dollars worth of Tesla stock, Musk set off a ripple effect. Over the last month or so, retail investors and index funds managed by institutional investors have followed suit and offloaded Tesla stock. Less savvy investors may not completely understand why Musk is selling some of his Tesla stock and view the sell-offs from its CEO as concerning.  

If this weren't enough, Musk has made a lot of changes (some appearing erratic and emotional) at Twitter. To summarize, several journalists have been banned (only to have their accounts reinstated), Musk has conducted a number of questionable public polls, and he has sparred with politicians. 

Colin Rusch, a research analyst at Oppenheimer, downgraded Tesla stock and believes that Musk is single-handedly tarnishing the brand. Mark Delaney, an analyst at Goldman Sachs, echoed Rusch's concerns about Tesla's brand and slashed his price target (although he still maintains a buy rating). Moreover, during a recent interview on CNBC, Dan Ives, an analyst at Wedbush Securities, stated that he thinks Tesla has a "leadership problem."   

But there are some legitimate concerns

While politics and social media protocols are important, financial analysts tend to pay closer attention to key performance metrics and economic factors. Wells Fargo recently released a note to investors and cited slowing demand for Tesla vehicles as its primary concern. More specifically, Wells Fargo's research suggests that the market in China is beginning to cool. As economists around the globe are wary of a possible recession in 2023, Wells Fargo is hypothesizing that the waning demand in China could ripple through other large markets in North America or Europe. For these reasons, Wells Fargo maintains a neutral rating on Tesla stock.

Along similar lines, Goldman Sachs reduced its price target on Tesla but does maintain a buy rating. However, research analysts at Goldman seem to agree with Wells Fargo, and wrote that plateauing demand may be an issue. However, the sentiment at Goldman Sachs seems to be that these demand trends could very much be influenced by the current economic climate, and not necessarily indicative of long-term consumer demand. The bank also made sure to remind investors that Tesla has done a nice job expanding its margins, as well as that some of its factories still not operating at full capacity.   

What does valuation suggest?

In December 2021, Tesla had a market capitalization of $1.1 trillion and was trading at 343 times its earnings. Exactly one year later, as of this writing, Tesla's market capitalization is $435 billion, and the stock trades at 43 times its earnings. What has changed?

From a business perspective, Tesla has continued to demonstrate that it can achieve operating efficiency and increase its production capacity. For the quarter that ended September 30, 2022 Tesla grew its automotive revenue by 55% year over year, and gross profit on automobiles grew 42% year over year. By expanding its margins, Tesla has consistently generated operating cash flow, thereby bolstering its balance sheet. As of Q3 2022, Tesla carried $21 billion of cash and marketable securities on its balance sheet. 

These financial metrics should not be discounted. While Wall Street raises some legitimate concerns, the potential of slowing demand or lingering inflation is very much short-term. Musk has navigated Tesla through many different storms and challenges. As a fellow Motley Fool contributor points out, Musk has been responsible for running different multibillion-dollar enterprises, including Tesla, for many years. Given the ratcheted-up attention at Twitter, combined with Musk's stock sales to finance the transaction, it seems that a meaningful number of investors are acting more from an emotional standpoint than a fundamental purview.

It can be discouraging to buy a stock when the price continues to fall. However, if anything, Tesla's valuation is beginning to normalize. While the company has achieved a lot of notable milestones, it likely was not worth over a trillion dollars just a year ago. For this reason, now could be a generational time to dollar-cost average into the stock if you're a long-term investor. Despite near-term macro headwinds in the form of high inflation and possible recession, Tesla is still the undisputed leader in the EV market and has several catalysts that can contribute to meaningful long-term growth.