Tesla (TSLA) shares fell over 12% on April 26, far outpacing the broader stock selloff, as the market digested the implications of Tesla CEO Elon Musk reaching an agreement to buy Twitter.

We think the market reacted negatively to Musk likely spending less time running Tesla. However, we don't think Tesla needs Musk to closely oversee day-to-day operations, as it has shown the ability to boost production and drive profitability from operating leverage.

We think Musk's direct reports should be able to run the various aspects of Tesla as the company continues to increase vehicle deliveries, reduce unit production costs, and develop autonomous driving software. As such, we see no reason to change our outlook for the company.

We maintain our $750 fair value estimate for Tesla as well as our narrow moat rating. Despite the selloff, Tesla shares trade more than 15% above our fair value estimate. As such, we view Tesla as slightly overvalued currently.

We continue to forecast that slowing vehicle delivery growth will result in a smaller total addressable market for Tesla's ancillary products, including its autonomous driving software and insurance.

A potential headwind for Tesla's automotive business comes from increased electric vehicle competition, particularly in pickup trucks. On April 26, Ford began production of its F-150 Lightning, which we expect will quickly become the dominant EV truck on the market.

While Tesla has said it aims to start selling the Cybertruck next year in 2023, Ford will by then be the incumbent, and General Motors plans to launch its pickup truck in the same year. As such, Tesla won't enjoy the first-mover advantage it has had for its four current models.

While we think Tesla will maintain its technological advantage, increased competition will lead to slower sales growth over time.