Riding the tumultuous waves of the market, the electric vehicle (EV) behemoth, Tesla (TSLA), with a staggering $805 billion market cap, has left investors hanging onto the edge of their seats since its peak in November 2021. Currently trading 39% below its record highs, the stock has surged by 43% in the past month alone. A roller-coaster journey, indeed.
Despite the wild swings, Tesla has rewarded shareholders with a jaw-dropping return of nearly 16,000% since its IPO back in 2010. A testament to its resilience and market dominance.
Recently, investors had been eagerly pricing in the potential windfall from Tesla’s Robotaxi, envisaging billions of dollars pouring in, essentially creating a lucrative revenue stream for the company. However, the much-anticipated robotaxi event slated for August 8 has hit a roadblock and will now be unveiled a few months later. The plot thickens.
Let’s dive deeper into whether Tesla’s stock is still a diamond in the rough at this juncture.
UBS Sounds the Alarm
Last week, UBS made a drastic move by downgrading Tesla from “neutral” to “sell,” albeit bumping its target price from $147 to $197. In a bold move, UBS cited concerns over Tesla’s hefty investments in artificial intelligence (AI) and the sluggish pace of developments in this sector, potentially casting a shadow on Tesla’s valuation.
Will Tesla’s AI ambitions steer it towards a brighter future, or are stormy waters ahead?
Evaluating Tesla’s Worth
Quirky research from Data Trek points out that merely 9% of Tesla’s current value is tethered to its actual operations, a stark contrast to the S&P 500’s 45%. This leaves a whopping 91% of Tesla’s valuation dangling on the prospects of future earnings, essentially dubbing it a “faith-based stock.”
With a sky-high forward earnings multiple of over 90x, Tesla’s valuation seems to defy gravity, especially in the face of sliding sales and shrinking margins. Investors are placing a hefty bet on Tesla’s ability to reign supreme in the ever-crowded electric vehicle arena.
The Robotaxi Revelation Revisited
Newsflash: Tesla has hit a speed bump. A Bloomberg report has confirmed delays in the highly anticipated Robotaxi event scheduled for August 8, now pushed to October due to design refinements. Will Tesla dazzle investors with its autonomous dream machines, or face a reality check from the Street?
The countdown to the Robotaxi is on, but will it be met with cheers or jeers?
A Trump Card for Tesla?
Analysts suggest that a Trump victory in the U.S. presidential race could play to Tesla’s advantage. The potential escalation of tariffs on Chinese EVs and the uncertain fate of EV tax credits might sway the pendulum in Tesla’s favor, solidifying its position amidst a shifting political landscape.
Could Tesla emerge as the dark horse in a political showdown, or will uncertainties derail its momentum?
Out of 33 analysts analyzing Tesla’s trajectory, opinions are divided with nine shouting “strong buy,” two advocating “moderate buy,” 14 opting for “hold,” and eight foreseeing a “strong sell.” The consensus remains steadfast amidst the market commotion.
The average 12-month target price for TSLA stock stands at $188.47, signaling a potential 25% dip from Monday’s closing price.