Tesla: Betting On The Future With A Weak Present Is Risky


  • Tesla’s continued price cuts despite flat interest rates indicate microeconomic demand issues rather than macroeconomic customer affordability needs.
  • Competitive threats in the EV OEM market are mounting and Tesla is losing market share in all major geographies.
  • Tesla’s energy business is a small silver lining that is expected to grow handsomely and have margin expansion. But it is not enough to offset the weakness in automotive sales.
  • Tesla’s 84.5x 1-yr fwd PE is at precarious levels. Investors are banking a lot on immaterialized growth multipliers of FSD and Optimus, which I view as too risky.
  • I’m holding off on a ‘Sell’ view as the technicals vs the S&P500 show limited runway for bearish moves as prices trade closer to the support of a monthly range.

Highline over the forest. Rope walker walks on a rope at high altitude. Drone view. Slackline theme


Performance Assessment

I had a ‘Sell’ rating in my last coverage of Tesla (NASDAQ:TSLA), which played out well:

However, I had updated my stance

Analyst’s Disclosure: I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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