Vote Now | Tesla's Biggest Bear Says the Company Has Reached the End of 'Hyper Growth' Mode—and It's Beginning A Totally Different Chapter
As the most bearish Tesla analyst on Wall Street, Gordon Johnson has taken abuse for years from bullish analysts and investors for arguing that Elon Musk's EV giant is overvalued. But with shares down over 70% in the past 12 months, some Tesla investors are beginning to heed Johnson's warnings.
"We've been saying this all along, but nobody wanted to listen," the CEO of GLJ Research said on Tuesday. "It's just a car company that can't sell its capacity.”
Demand Issues And Lofty Forecasts
On Monday, Tesla reported 405,278 total vehicle deliveries in the fourth quarter compared with a consensus Wall Street estimate for roughly 420,000. Tesla delivered more cars than ever in 2022, but still missed its vehicle delivery target for the full year 2022.
Johnson argues that the company's lead times, how long it takes customers to get their vehicles, and backlog, the number of orders waiting to be filled, have dropped dramatically in recent weeks, revealing demand weakness. "Yet it's valued as if it's hyper growth. That is why the stock is imploding," Johnson said.
He thinks Tesla will fall to just $24.33 per share by the end of 2023 as investors recognize that it has built too much capacity.
False Promises and A Rich Valuation
Tesla isn't Elon Musk's only company, and his other ventures have worried some analysts in recent weeks.
But Johnson said that he believes Tesla's real issue is a more long-term growth problem that makes its current valuation illogical.
Wall Street is expecting 35% to 40% delivery growth next year, but Johnson argues Tesla won't come anywhere close to that unless it cuts prices — and the company has already instituted multiple price cuts in the U.S. and China. At the end of December, it went so far as to offer customers a $7,500 discount on two major car models if they bought them before the end of the year.
"They're valued at around two times $TOYOTA MOTOR CORP(TOYOF.US$. Toyota sells 11 million cars a year; Tesla sells 1.3 million cars a year." Johnson said.
Johnson also argued that promises from bullish analysts and CEO Musk that Tesla will find new opportunities for growth in areas outside EV sales should be met with suspicion. He noted that Musk has made false promises before, including saying Tesla would have one million robo-taxis on the road by 2020 and that the CyberTruck would begin deliveries in 2021.
"Do you see a pattern here?" he said, warning investors not to get sucked into stories and instead focus on real developments.
Mooers, do you agree with what he said? Do you remain bullish or bearish on Tesla?
Source: Fortune, Yahoo Finance
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Rui Correia : Tesla I’m the long run will be just fine, but until then ( 2023 ) will be painful
102945117 : if people never thought Steve jobs will not be able to sell iphone and changed the way we know about apps, would there be Elon musk and Tesla...a revolution in EV and renewable energy has been started..cars are going into electrification and AI...and AI with wheels are going I to robotics...that is not what Toyota is doing. ..they don't even own a charging station....this is what bulls see....though indeed FED actions have greatly discounted all future value
N0Rush2Buy : Viewing Strong Support @$91.05. Get Ready to load the boat. Don’t fall for fake rallies