Tesla Shares Are Down 40% This Year—Here’s Why The Stock Could Fall Further

Forbes04-22

TOPLINE Tesla stock notched another grim milestone Friday, extending stock year-to-date dive to over 40%, and there remains plenty of cause to remain highly cautious about the stock in the near term ...

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Dr Rck
·04-22
It was many times over in terms of P/E to start off with, so now is the time to reflect the true value of TSLA considering all these headwinds which are still ongoing. It may continue to drop further but still within the approximate value of its share.
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- Dr Rck:
  Depending on how fast TSLA implements its new product lines such as robotaxis, hunanoids, FSD adoption, for now Elon needs hard tuning to its core business. Long term will be good if he can overcome the hurdles and headwinds facing its fleet!
  04-23
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- AbnerKeppel:
  What are your thoughts on TSLA's long-term prospects?
  04-23
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elvinng
·04-22
Tesla, f u
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KEY FACTSTesla’s 2% loss to about $147 per share Friday, spurred by the company recalling all 3,878 Cybertrucks on the road, was its sixth consecutive day of a more than 1% loss and sent its share price to 65% below its split-adjusted November 2021 peak of over $400.It’s now the cheapest it’s been since last January to buy Tesla stock, but there’s plenty of negative catalysts behind the steady losses.Tesla’s nightmarish start to the year saw its January earnings reveal significant misses for both sales and profits; a 9% year-over-year decline in first-quarter vehicle deliveries, far short of forecasts of 7% growth; and comes ahead of the company’s first batch of 2024 financial results Tuesday, which analysts expect to reveal a 5% year-over-year slip in revenues and a 42% drop in profits, according to consensus forecasts compiled by FactSet.Aside from the bad headlines, what makes Tesla stock still a difficult bet? 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In short, experts believe the thesis to invest in Tesla has shifted in recent months. While it initially appealed to an investor attracted to Tesla’s central electric vehicle business, it is now more attractive to someone who believes in the company’s long-term bid on artificial intelligence, or the carmaker’s ability to make a major breakthrough in its ambitious robotaxi program, which would set a ride-hailing fleet of self-driving Tesla cars onto the road. It’s reasonable to think Tesla can pull this off, considering it grew its EV deliveries from 50,000 cars in 2015 to 1.8 million last year while maintaining incredible capital discipline. But the timeline to stick the landing is far longer than the timeline many investors are comfortable with. To illustrate, Deutsche Bank analysts projected this week that robotaxis could bring in $15 billion in gross profits for Tesla by the end of the decade, but addressing that opportunity will require solving “significant technological, regulatory and operational challenges.”SURPRISING FACTExxonMobil overtook Tesla in market cap Friday, a symbolic passing of the torch from the most valuable renewable energy car company to the U.S.’ largest oil company. At its 2021 peak, Tesla was valued about $955 billion higher than ExxonMobil.KEY BACKGROUNDTesla has underperformed the S&P on basically any timeframe dating back to the beginning of 2021, but its returns are significantly better than the broader market for those who got in before the company’s meteoric rise close to the onset of the Covid-19 pandemic. As Tesla’s stock market troubles escalated, so did drama involving Musk, who notoriously bought the social media platform then known as Twitter for $44 billion in 2022, selling off billions of dollars of Tesla shares to do so, undertaking various controversial changes at the site and increasingly wading into political issues rarely discussed by executives of his standing. Musk’s $181 billion net worth is nearly $140 billion lower Friday than it was at its 2021 apex of $320 billion, though he remains the third-richest person in the world, according to Forbes’ calculations. 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Long term will be good if he can overcome the hurdles and headwinds facing its fleet!","text":"Depending on how fast TSLA implements its new product lines such as robotaxis, hunanoids, FSD adoption, for now Elon needs hard tuning to its core business. Long term will be good if he can overcome the hurdles and headwinds facing its fleet!","html":"Depending on how fast TSLA implements its new product lines such as robotaxis, hunanoids, FSD adoption, for now Elon needs hard tuning to its core business. 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