Original title: Key technology delays market competition intensifies, Tesla’s stock price falls endlessly
Competition with established automakers is intensifying, threatening Tesla’s dominance in the market. Analysts believe that there are few favorable factors that can reignite the market’s frenzied pursuit of Tesla shares. Currently, Tesla stock is down about 40% from when it joined the benchmark.
Schein expects BYD to become the leading EV maker in the long run. “We are waiting for BYD’s share price to fall further before adding to our position. Of course, if Tesla falls 15% to 20% from now, we will also buy.”
Tesla appeared to be invincible a year ago, with shares near all-time highs, as optimism about the global electric vehicle market soared, according to Bloomberg. However, investors are now struggling to find a bottom for Tesla stock.
Given Tesla’s volatility and CEO Elon Musk’s mercurial style, the stock is highly risky. Still, Tesla’s share price has plunged staggeringly this year. As of the close of last Tuesday (December 20), Tesla stock lost more than 60%, evaporating about $626 billion, setting a record for the annual decline.
Two years after joining the S&P 500, Tesla faces new circumstances. Increased competition from established automakers threatens Tesla’s market dominance. Analysts believe that there are few favorable factors that can reignite the market’s frenzied pursuit of Tesla shares. Currently, Tesla stock is down about 40% from when it joined the benchmark.
“The narrative that Tesla is a leader in everything is weakening,” said Cowen analyst Jeffrey Osborne. La stocks tend to be the best performers. It’s unclear what to get excited about in the new year.” He has an equivalent rating on Tesla.
share price reverses
Last Tuesday, Tesla shares fell 8.1% to $137.80, the lowest level since November 2020. A day later, the stock briefly fell below $136.03. Osborne pointed out that Tesla’s highly anticipated self-driving software and battery technology have failed to meet expectations; at the same time, the Cybertruck’s futuristic design makes it difficult to become a mainstream model.
Analysts scramble to reassess Tesla’s prospects amid plummeting stock prices, dovish earnings expectations, and reset valuations for growth companies: Wall Street’s average price target for Tesla has dropped to more than a year Come to the bottom. Analysts have an average price target of about $259, a far cry from the record closing price of $409.97 set in November.
Tesla is facing a stunning reversal from a year ago, when it was valued at nearly $1 trillion, earnings continue to beat expectations, and demand for electric vehicles seems to be growing as more countries announce green energy policies. About to soar.
“Investors are expecting significant revenue growth for Tesla as production capacity expands,” said Bruce Kahn, a portfolio manager at Shelton Capital Management, which held shares at the end of September. About 236,000 shares of Tesla stock. Tesla’s sales were expected to go from 1 million to 3 million, but that hasn’t happened yet.
Tesla has been one of the weakest stocks on the back of concerns that an economic downturn could dampen consumer demand for electric vehicles. Among the 10 constituents of the New York Stock Exchange’s FANG+ index, Tesla’s stock price fell second only to Meta. Meanwhile, Musk’s acquisition of Twitter has fueled pessimism over concerns that he is focusing more on the social media platform and neglecting Tesla.
However, in terms of valuation, Tesla is still the fourth-ranked stock on the NYSE’s FANG+ index, trading at 33 times forward 2022 earnings.
Market Cap $440 Billion
At present, Tesla’s market value is about 440 billion U.S. dollars, far exceeding other major automakers in the world. In the current fiscal year ending March 31 next year, Toyota is expected to sell 8.9 million vehicles, while Tesla’s 2022 deliveries are expected to be around 1.3 million, according to Bloomberg data. Meanwhile, bulls point to Tesla’s much higher profit margins.
“Tesla still looks like a technology company with high growth potential, which other automakers don’t,” Kahn said. “Tesla’s valuation is still high because people think electric vehicles will grow exponentially, It will be one of the major players in that.”
However, in the eyes of some people, Tesla’s stock has further room to fall. In fact, Tesla’s momentum is not strong, and neither the decision to split the stock nor the possibility of share buybacks have any developments that can boost the stock in the long run.
It’s a moment of reckoning for Tesla investors, many of whom believe Musk’s ability to drive the company’s success underpins its potential. That partly explains Tesla’s sharp drop in its stock price, which is expected to grow by more than 80% this year, with revenue up nearly 55%.
“From a brand standpoint, Musk is Tesla, and Tesla is Musk,” said Robert Schein, chief investment officer at Blanke Schein Wealth Management, which owns Tesla shares. The more you manage Twitter in a political way, the more likely you are to tarnish the Tesla brand.”
Schein expects BYD to become the leading EV maker in the long run. “We’re waiting for BYD’s share price to fall further before adding to our holdings. Of course, if Tesla falls 15% to 20% from now, we’ll buy as well,” Schein said. (Jiang Zhiwen/compiled by China Economic Net)