Tesla (TSLA) has had a terrible start to 2024. But Tesla stock hasn't become significantly cheaper, by a key metric.
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Often when a stock sells off hard, investors and Wall Street analysts will tout it as a buy, citing much-cheaper valuations.
Tesla stock plunged 29.7% through April 11, one of the worst performers on the S&P 500 this year Shares are 58% below their late 2021 all-time high. But Tesla has largely tracked declining earnings estimates amid weaker-than-expected deliveries despite ongoing price cuts.
Tesla Stock Valuation
| Date | Tesla stock price | 2024 EPS estimate | 2024 P-E ratio | 2025 EPS estimate | 2025 P-E ratio |
|---|
| Dec. 30, 2022 | 123.18 | $7.07 | 17.4 | $7.93 | 15.5 |
| March 31, 2023 | 207.46 | $5.62 | 36.9 | $6.95 | 29.8 |
| Sept. 29. 2023 | 250.22 | $4.68 | 53.5 | $6.21 | 40.3 |
| Oct. 31, 2023 | 200.84 | $3.93 | 51.1 | $5.54 | 36.2 |
| Nov. 30, 2023 | 240.08 | $3.85 | 62.3 | $5.40 | 44.5 |
| Dec. 29, 2023 | 248.48 | $3.79 | 65.5 | $5.27 | 47.2 |
| Jan. 31, 2024 | 187.29 | $3.14 | 59.7 | $4.38 | 42.8 |
| Feb. 29, 2024 | 201.88 | $3.10 | 65.2 | $4.25 | 47.5 |
| March 28, 2024 | 175.79 | $2.87 | 61.25 | $3.91 | 45 |
| April 11, 2024 | 174.6 | $2.68 | 65.1 | $3.7 | 47.2 |
Source: FactSet
Analysts have cut their 2024 earnings per share targets to $2.68 a share, according to FactSet, down from $3.79 at the end of 2023, $5.62 a share at the end of March 2023 and a whopping $7.07 at the end of 2022.
So the forward price-earnings ratio for Tesla stock is 65.1 as of early on April 2. That is up from 61.25 on March 28 but little changed from the end of February or last year. It's above where it was on Sept. 30. It's well above the 2024 P-E ratio of 36.9 back on March 31, let alone the 17.4 P-E ratio at the end of 2022.
The same trend holds for 2025. Analysts have cut Tesla earnings per share estimates for 2025 to $3.7 vs. $5.27 at the end of last year. (Notably, that is now well below Tesla's peak earnings of $4.07 a share in 2022.) Analysts expected $6.95 on March 31, 2023 and $7.93 at the end of 2022.
The 2025 P-E ratio for Tesla is now 47.2, up from 45 at the end of March. That's just below where it was at the end of February and even with Dec. 29. It's up substantially from the 2025 P-E ratio of 29.8 at the end of March 2023 and 15.5 at the end of 2022.
Wall Street is continuing to cut Tesla profit targets following dismal first-quarter deliveries released on April 2. Tesla earnings are due April 23.
Tesla's valuation is far above that of other profitable automakers. Toyota Motor (TM) has a forward P-E ratio of 10. General Motors (GM) has a forward P-E ratio of 4. Among EV players, Li Auto (LI) has forward P-E ratio of 16. EV giant BYD (BYDDF), has a forward P-E ratio of 15.
Ferrari (RACE) is the only one close to Tesla, with a forward P-E of 50.
Investor's Business Daily usually doesn't focus on price-earnings ratios, because many leading stocks boast high valuations as investors bet on strong growth to justify them. During its huge run, Tesla was a growth company with high P-E ratios. But it's not a growth company right now.
Tesla Stock Bull Case
Of course, to an increasing extent, the Tesla bull case is looking beyond 2025, with hopes for a next-generation small EV or even looking beyond electric vehicles. Some analysts, most famously Morgan Stanley's Adam Jonas, ascribe the bulk of their Tesla stock price targets to outside of EVs and for big bets such as self-driving, robotics and artificial intelligence.
Clearly, much or even most of Tesla's current market valuation is a bet that some of those moonshots will pay off down the road, delivering massive profits.
Whether or not they pay off is an open question.
But Tesla stock still isn't cheap.
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FAQs
Tesla has a conensus rating of Hold which is based on 8 buy ratings, 15 hold ratings and 9 sell ratings. The average price target for Tesla is $173.29. This is based on 32 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
Is Tesla a good stock to buy in 2024? ›
Tesla Stock Declines In 2024
That signals another year of earnings declines for this growth stock. Analysts currently expect Tesla earnings per share of just $2.48 in 2024, according to FactSet. That would be more than a 20% decline vs. $3.12 in 2023.
Is Tesla going lower? ›
Tesla has been facing more uncertainty on Wall Street than at any point since its near-bankruptcy several years ago. Its share price has plunged by nearly two-thirds — from about $407 at its November 2021 peak to about $145 as of Tuesday's market close.
What is the consensus for Tesla in 2024? ›
For the fiscal year ending Dec 2024 , the consensus EPS* forecast has increased over the past week from 1.91 to 1.99(4.19%) and decreased over the past month from 2.25 to 1.91(15.11%). Of the 7 analysts making yearly forecasts, 1raised and 6 lowered their forecast.
What is the target price for Tesla in 2025? ›
The long-term forecasts for Tesla's stock value in 2025 show a wide range of analyst expectations, from over $550 to as high as $1100 per share. These projections account for various factors, including Tesla's market performance, EBITDA margins, and the expansion of the electric vehicle market.
What is the prediction for Tesla next week? ›
What is the Tesla stock forecast? The Tesla stock forecast for tomorrow is $ 166.33, which would represent a -1.22% loss compared to the current price. In the next week, the price of TSLA is expected to increase by 7.79% and hit $ 181.50.
Where will Tesla stock be in 5 years? ›
When CNBC asked what Tesla would be worth in five years, Wood confidently said $2,000 per share. The $2,000 per share figure is not new, either. In April 2023, Ark Invest published its valuation model for Tesla with the same price target and the expectation of reaching it by 2027.
How much debt is Tesla in? ›
Total debt on the balance sheet as of March 2024 : $9.91 B
According to Tesla's latest financial reports the company's total debt is $9.91 B. A company's total debt is the sum of all current and non-current debts.
Will Tesla last long term? ›
The life expectancy of a Tesla car can vary, but many Tesla owners report their vehicles lasting well over a decade with proper maintenance. Tesla's battery and drive unit warranty usually spans 8 years or a specified mileage limit, which can offer a useful guideline.
Why is Tesla falling? ›
The EV giant said Tuesday its Q1 revenue decline was primarily due to a reduced average vehicle selling price and a drop in vehicle deliveries. Tesla added revenue was also hindered by issues with the Model 3 refresh rollout at its Fremont factory.
Continuing a dismal year for Tesla investors, the stock on Thursday fell $5.52, or 3.5%, to close at $149.93, leaving shares down more than 39% this year. The stock last traded at the $150 level in January 2023. Tesla sales plummeted last quarter as competition increased and EV sales slow.
Is Tesla a good long-term stock? ›
With its 3-star rating, we believe Tesla's stock is fairly valued compared with our long-term fair value estimate. We forecast that Tesla's deliveries will be roughly flat in 2024 versus 1.8 million in 2023.
Will Tesla lower prices in 2024? ›
To maintain sales momentum in 2023 in 2024, Tesla has aggressively cut vehicle prices and offered discounts. As a result, auto gross margins, which peaked at 30% in Q4 2021 amid industry chip shortages, have plunged well below 20%.
What will Tesla be in 2040? ›
Tesla stock's average annual return for the past ten years has been around 40%. If this average annual return were to continue until 2040, Tesla stock would reach a price of $101,597.
Will Tesla rebound in 2024? ›
Wall Street consensus has 2024 Tesla earnings firmly below 2023's level. That signals another year of earnings declines for this growth stock.
Is Tesla stock expected to rise? ›
Tesla Stock Forecast
The 31 analysts with 12-month price forecasts for Tesla stock have an average target of 182.87, with a low estimate of 22.86 and a high estimate of 310. The average target predicts an increase of 3.00% from the current stock price of 177.55.
What is the fair value of Tesla stock? ›
As of 2024-05-12, the Fair Value of Tesla Inc (TSLA) is 107.02 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 168.47 USD, the upside of Tesla Inc is -36.5%.
Is NVDA a good stock to buy? ›
Nvidia Corp. (NVDA) was a top performer in the quarter gaining 82.5% in the period. While the company has had an impressive run, gaining 242% over the last year, the valuation has been supported by the impressive growth in Revenue (126%), EPS (392%) and free cash flow (610%) over the last year.
What will Tesla stock be worth in 2040? ›
Key takeaways:
| 2025 | 2040 |
|---|
| TSLA stock forecast (5% annual growth) | $184 | $403 |
| TSLA stock forecast (S&P 500 historical 11.13% ROI - last 50 yrs) | $195 | $1,056 |
| TSLA stock forecast (QTEC historical 15.2% ROI - last 18 yrs) | $202 | $1,947 |
Mar 21, 2024
