Interested in more cheap stocks? Check out our recent episode on Taiwan Semiconductor
Andrew Willis:So, Elon’s had a rough couple of weeks. His spaceship exploded, he had more checkmark drama on Twitter, and a group of institutional Tesla shareholders complained about ESG at the company and that its CEO wasn’t staying focused.
To top it off, we saw margins fall by nearly five percent from the previous quarter. We reduced our fair value for Tesla TSLA stock by ten dollars… But it still looks cheap, and strategist Seth Goldstein says his long-term view remains intact.
Even if the company has a distracted CEO, investors should at least keep in mind the groundwork that’s been laid. We’re talking about overhead expenses that should decline over time and significant progress toward functional parity with traditional gas vehicles – areas where you can still find Tesla with a head start.
For Morningstar, I’m Andrew Willis.
Bulls Say
- Tesla has the potential to disrupt the automotive and power generation industries with its technology for EVs, AVs, batteries, and solar generation systems.
- Tesla will see higher profit margins as it reduces unit production costs over the next several years.
- Through the combination of its industry-leading technology and unique supercharger network, Tesla offers the best function of any EV on the market, which should result in its maintaining its market leader status as EV adoption increases.
Bears Say
- Traditional automakers and new entrants are investing heavily in EV development, which will result in Tesla seeing a deceleration in sales growth and being forced to cut prices due to increased competition, eroding profit margins.
- Tesla's reliance on batteries made in China for its lower-price Model 3 vehicles will hurt sales as these autos will not qualify for U.S. subsidies.
- Solar panel and battery prices will decline faster than Tesla can reduce costs, resulting in little to no profits for the energy generation and storage business.
FAQs
Stock valuation: Tesla is a high-growth stock. With uncertainty around the company's affordable vehicle and declining deliveries, its stock sold off heavily in early April as market sentiment turned against its growth prospects. We believe the earnings report and call went a long way to improve market sentiment.
Why are people still buying Tesla stock? ›
Even after the carnage in Tesla's financial results and projections, its valuation remains far richer than most other public companies' by a host of metrics: its price-to-earnings ratio—which measures projected profits over the next 12 months compared to a company's market value—of over 50 is about three times that of ...
Will Tesla stock go up in 2024? ›
Source: FactSet
Analysts now sees 2024 earnings per share targets at $2.46 a share, according to FactSet, down from $3.79 at the end of 2023, $5.62 a share at the end of March 2023 and a whopping $7.07 at the end of 2022. So the forward price-earnings ratio for Tesla stock is 73.7 as of May 5.
Is Tesla a good investment now? ›
Analysts currently expect Tesla earnings per share of just $2.48 in 2024, according to FactSet. That would be more than a 20% decline vs. $3.12 in 2023. Wall Street's 2024 EPS consensus estimates for Tesla have come down 35% since the end of 2023.
How much is Tesla in debt? ›
Total debt on the balance sheet as of March 2024 : $9.91 B
According to Tesla's latest financial reports the company's total debt is $9.91 B. A company's total debt is the sum of all current and non-current debts.
Why did Tesla surge? ›
Stock Has Surged Since Earnings Call Last Week
The stock started to rebound last week as investors and analysts focused on Musk's comments in the company's first-quarter earnings call, including plans to focus on a more affordable model and autonomous taxis.
Why to avoid Tesla stock? ›
Another reason to avoid buying Tesla is because of the valuation. Even though shares are currently 56% off their all-time high, they still trade at a steep price-to-earnings ratio of 46.2.
What is a good price for Tesla stock? ›
Overall, 43% of analysts covering Tesla stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Tesla shares is about $183 each.
Why is Tesla stock recovering? ›
The talk of new offerings on a faster timeline sent Tesla shares soaring in after-hours trading, a much-needed boost, after months of decline during which Tesla has struggled with fierce competition and falling sales. The gains came despite Tesla releasing first-quarter results that missed Wall Street expectations.
Where will Tesla stock be in 5 years? ›
When CNBC asked what Tesla would be worth in five years, Wood confidently said $2,000 per share. The $2,000 per share figure is not new, either. In April 2023, Ark Invest published its valuation model for Tesla with the same price target and the expectation of reaching it by 2027.
Based on 32 Wall Street analysts offering 12 month price targets for Tesla in the last 3 months. The average price target is $173.29 with a high forecast of $310.00 and a low forecast of $22.86. The average price target represents a -0.75% change from the last price of $174.60.
Will Tesla succeed long term? ›
By addressing the limitations of EV technology, navigating increasing competition, and adapting its strategies to appeal to a broader consumer base, Tesla can potentially secure its position as a leader in the automotive industry's electric future.
Is Tesla a hold or sell? ›
Is Tesla stock a Buy, Sell or Hold? Tesla stock has received a consensus rating of buy. The average rating score is and is based on 46 buy ratings, 32 hold ratings, and 16 sell ratings.
Does Tesla have a good future? ›
Key Points. Tesla is set to remain the leader in the EV industry. If Tesla develops groundbreaking technologies, its business could look different 10 years from now. The stock still carries a premium valuation.
What was Tesla's highest stock price? ›
The all-time high Tesla stock closing price was 409.97 on November 04, 2021. The Tesla 52-week high stock price is 299.29, which is 68.6% above the current share price.
Why is Tesla's P/E ratio so high? ›
However, because Tesla's earnings are expected to fall this year, the P/E ratio will go up even if the stock price stays the same. Which is why Tesla has a forward P/E ratio of 55.7 -- much higher than its trailing ratio.
Why is Tesla stock so strong? ›
Tesla's move to change its product lineup, however, was a bigger reason the stock jumped, clawing back some of the 42% year to date loss. The company said it is accelerating the “launch of new models ahead of our previously communicated start of production in the second half of 2025.”
