Why now isn't the time to go all-in on TSLA
The king of the EV sector $Tesla(TSLA.US$ The outlook has clearly changed. The company has long rebelled against critics, but it is clear that the company is at a critical crossroads. Currently, it has fallen close to 30% year to date (a marked improvement from the low), and some bulls may be looking for signs that it is time to increase their positions in TSLA stock.
Consumer demand has declined, and competition in this field has intensified dramatically, and this is happening amid expectations that government subsidies will disappear.
Despite efforts to cut costs, Tesla continues to face significant pressure from the market. There is a possibility that stagflation will worsen the risk, and TSLA stocks seem overestimated to me with an expected PER of 44 times.
The question is, is Tesla really an AI, software, or technology stock, as the bulls and bulls in the investment world suggest.
I don't know if that is true, but I think there is a drastic drop from current levels.
I don't know if that is true, but I think there is a drastic drop from current levels.
Are TSLA stocks overvalued
After a sharp decline, investors and analysts often insist on buying stocks at reduced prices. Despite recovery after business performance recovery and expectations for fully autonomous driving, Tesla's stock price plummeted 28.8% by 5/17, making it one of the worst performing companies in the S&P 500.
The decline of Tesla, which is traded at a level of 50% or more below the high price in the latter half of 2021, did not match profit expectations, partly because deliveries were sluggish than expected.
The fact that Elon Musk made an optimistic statement about Tesla's future at the financial results conference on 4/23 and the news that there is a possibility that FSD will be approved in China was a fleeting encouragement. However, despite these developments, Wall Street continually revised its profit forecasts.
The market anticipated EPS in 2024 at $2.44, but this was down from past predictions of $3.79 and $7.07 for 2023 and 2022, respectively. This showed that the expected price-earnings ratio as of 5/5 was 72.8 times higher.
Analysts have continuously lowered Tesla's profit forecast for next year, and this year it was 5.27 dollars, but they expected 3.32 dollars.
The PE ratio in 2025 rose from 45 in March to 53.5, above the high level of the past 18 months. Other companies, such as General Motors and Toyota, also have low expected stock price-earnings ratios.
Will TSLA plummet 70%?
According to “The Big Short” analyst Danny Moses, he predicts that Tesla's stock price will soon fall rapidly. He predicts that TSLA will drop 70% and drop from its current price of 171 dollars to around 50 dollars.
Since Tesla appears to be interested in other fields such as AI and robo-taxis, Mr. Moses also shares his concerns and skepticism about the company's core business. He points out that investors are growing dissatisfied with Tesla and the company's future in the automotive industry.
Mr. Moses linked the expected recession to Tesla's focus on robo-taxis and AI ventures, and argued that underlying operational issues are hidden in these. He criticized that Chief Executive Officer Elon Musk (CEO) places importance on these initiatives while core businesses are struggling.
Despite the fact that stock prices temporarily rose after Mr. Musk's first quarter financial results were announced, Mr. Moses believes that these announcements have taken his eyes off Tesla's core issues, and continues to be skeptical.
Tesla was under strict investigation by the Department of Justice on suspicion of misrepresenting autonomous driving technology, and the focus of Mr. Moses's short position still remained.
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