Key Takeaways:
- Tesla’s stock is down 41% YTD, facing weak demand and rising competition.
- Piper Sandler analyst Alexander Potter remains bullish with a $450 price target, citing long-term potential.
- Tesla’s price cuts and insider stock sales raise concerns, but its future innovation in robo-taxis and energy could drive recovery.
So far this year, Tesla stock has been under intense stress across the board, but Wall Street analysts are are predicting a bullish forecasts. Piper Sandler’s Alexander Potter recommends Tesla with ‘Overweight’ and pegs a price target of $450 suggesting potential upside of 90% compared to current prices.
Although, the market isn’t convinced. Tesla shares are down 34.69% in the past month and 41% year to date, making it the worst performing stock among the 7 tech giants. With demand down and tough sales price cuts alongside super competitive fields, The question being asked is if Tesla can regain its momentum, or is this bullish call misplaced.
Tesla’s Stock Struggles: What’s Driving the Downtrend?
Several factors have contributed to Tesla’s steep decline:
1. Weak Demand & Price Cuts
Tesla has been slashing prices worldwide to attract buyers. In China, the company is now offering 0% APR financing on the Model Y, a move believed to counter slowing sales.
Despite this, The total sales in China were just 26,777 vehicles in February, down 11% year over year and 20% from January. At the same time,
Things do not seem to improve even in Australia as the EV market plunged by nearly 72% year over year.
2. Rising Competition & Changing Consumer Preferences
The once-dominant EV maker is now facing increasing pressure from rivals like General Motors (GM) and Ford (F), which are rapidly broadening their lineup of electric vehicles. Also many consumers are switching to hybrids now which is also weakening the demand for Teslas.
3. Wall Street’s Growing Skepticism
Many analysts are adjusting their expectations. Mizuho recently cut its Tesla delivery estimates, citing geopolitical changes and Elon Musk’s close ties to the Trump administration. There’s been some controversy too with reports that Tesla dealerships and charging stations for Tesla have been vandalized in the United States.
4. Tesla Insiders Are Selling Stock
Adding to all the worries, Tesla insiders have sold over $100 million worth of stock in the past month, raising doubts about the company’s near-term growth prospects.
Bullish Argument: Is the Market Overreacting?
Despite the storm, Potter is optimistic that Tesla still has long term potential. His central reason is: the capacity of Tesla is still to utterly transform transportation and energy markets.
Tesla’s big bets for robo-taxis and humanoid robots are seen as the big next frontier for growth, but not everyone is sure that opportunities will develop fast enough to justify a 90x P/E ratio of 90 based on earnings forecasts for 2025.
Read also: Nvidia’s AI Dominance: GTC 2025 Eases Wall Street’s Demand Concerns
