Key Insights
- Tesla stock price has retreated in the past few months.
- Analysts have lowered their expectations for the company.
- Technical analysis hints that the stock will rebound.
Tesla stock price has slumped in the past few months. It has moved from the year-to-date high of $497 to $381 today. This retreat may continue in the foreseeable future. Analysts are turning sour on the company amid growing risks.
Tesla Stock Has Slumped Amid Growing Risks
TSLA stock remains in a strong bear market after falling by 23% from its highest point this year. This retreat has accelerated as Wall Street analysts turned sour on the company.
MarketBeat data shows that the consensus target for the stock is $405, just a few points above the current $381. A closer look shows that most of the recent analyst ratings have been either “hold” or “neutral.”
UBS’s Joseph Spack reiterated his rating to neutral, while Jefferies placed a target of $375. That’s lower than where it is today. Citigroup, HSBC, and BNP Paribas analysts also left their ratings at the neutral level.
These ratings are coming as investors remain concerned about Tesla and its business trajectory. Analysts are concerned about the business as its slowdown continues.
One of the top concerns is that its robotaxi business has failed. Elon Musk believes this business to be the future of the transportation industry, A year after its launch, recent reporting suggests that it has only a handful of vehicles in its fleet.
A report by the Robotaxi Tracker shows that it has fewer than 50 vehicles, lower than those that Waymo has. It is still early. However, there are concerns on whether this business will start generating substantial revenue and profits for Tesla in the long term.
Tesla’s Core Business is Struggling
In addition to its robotaxi business, recent financial and delivery reports suggest that the company’s core business is struggling.
That is partly because the Trump administration decided to end the popular Federal Tax Credit. The same is happening in China, where officials in Beijing ended a similar credit line.
The most recent data showed that the company delivered 358k vehicles in the first quarter after producing 408,386. That 50,000 gap was the highest one in its history and was a sign that it was making more vehicles than the demand.
Wall Street analysts expect that its revenue growth will be under pressure in the coming months as competition rises.
For example, the average estimate is that its second-quarter revenue will be $24.6 billion. That’s up by 9% from the same period last year. It will be followed by $26.9 billion in the third quarter, down by 9% YoY.
Most notably, Tesla’s profitability may remain under pressure this year because of the ongoing investments in AI. The company recently warned that it will not achieve a positive free cash flow this year because of its Terafab project in Texas.
Meanwhile, the company is under pressure after a recent crash in Texas killed a 76-year-old mother. The victim’s family alleges that the crash was caused by its autopilot product, with federal officials taking over the investigation.
Tesla Stock Price Technical Analysis
The daily chart shows that the TSLA stock price has slumped from a record high of $497 to the current $381. It has dropped below the 50-day and 100-day moving averages and the 38.2% Fibonacci Retracement level.
MACD’s 2 lines have formed a bearish divergence. They are pointing downward and are moving downwards. Also, the Relative Strength Index (RSI) has continued falling.
It has formed a descending channel, which is shown in black, a sign that bears are in control. Therefore, the stock will likely continue falling as sellers target the next key target to watch, being at $350. A move above the upper side of the channel will invalidate the bearish outlook.
The post Tesla Stock Price Analysis as Analysts Turn Sour on Growing Risks appeared first on The Market Periodical.