Tesla: Betting On The Future With A Weak Present Is Risky (Archive)
Tesla’s lofty valuation hinges on speculative future bets amid deteriorating core fundamentals.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- 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.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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