‘Tesla’s Stock Valuation Is Insane’—Wall Street Strategist Drops Truth Bomb
Elon’s empire faces a reality check as analysts question the math behind its meteoric rise.
### The Bubble Debate Rages On
Tesla bulls cling to growth narratives while bears sharpen their knives—turns out, even trillion-dollar companies can’t defy gravity forever. One strategist calls it like they see it: ‘This isn’t valuation, it’s vertigo.’
### Fundamentals vs. Fairy Tales
Production bottlenecks? Cybertruck recalls? Doesn’t matter when you’re priced like the second coming of Apple. Meanwhile, legacy automakers quietly eat market share with actual profits.
### The Cynic’s Corner
‘But the AI playbook!’ cries every overleveraged fund manager—right before their risk department starts hyperventilating. Sometimes a car company is just a car company.
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Beyond revenue, Tesla’s stock also looks expensive based on earnings. It currently trades at 178 times its expected earnings, while the average company in the S&P 500 (SPY) trades at just 21 times. Analysts have also lowered their expectations for Tesla’s future earnings, with projected earnings per share for 2025, 2026, and 2027 dropping by more than 70% since October 2022. Another concern is that tax credits for electric vehicles—which have helped Tesla’s sales and profits—might disappear. Analyst Ryan Brinkman from JPMorgan estimates that more than half of Tesla’s current profits depend on these subsidies, which could vanish with a new “big, beautiful” bill.
Investors are also still reacting to Tesla’s disappointing first-quarter results, where it missed expectations for both revenue and earnings due to weaker demand for electric cars and controversy over Elon Musk’s political involvement. Tim Urbanowicz from Innovator ETFs said that Tesla often sets ambitious goals, but reaching them usually takes longer than expected. He warned that while Tesla’s vision is bold, the stock’s high price may not be justified unless the company starts delivering results much faster.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $287 per share implies 16.6% downside risk.
