Tesla Stock Forecast & Analysis: A Deep Dive into Analyst Expectations and AI-Powered Insights
Tesla Inc. (TSLA)
Stock Forecast & Analyst Ratings
Based on a consensus from 41 analysts, the average target price for Tesla's stock over the next 12 months is USD 290.71, which reflects a potential downside from its current trading price of USD 355.84. Despite the forecast indicating a decline, analysts remain largely positive about Tesla's prospects in the medium-to-long term, with an average analyst rating of Buy.
Stock Performance Overview
Weekly Performance: Tesla's stock price has experienced a +1.46% increase over the past week, indicating strong short-term momentum.
Monthly Performance: However, the stock has declined by -16.57% over the past month, potentially driven by broader market conditions or sector-specific challenges. This decline highlights some volatility, which is characteristic of Tesla's stock in the short term.
Yearly Performance: Looking at the longer-term trend, Tesla has demonstrated an impressive +77.96% increase over the last year, underscoring its dominant position in the EV market and the growth it has achieved in various segments.
AI-Powered Stock Analysis by Stock Target Advisor
Stock Target Advisor provides a detailed, AI-powered analysis of Tesla's stock performance, which is Slightly Bullish (based on 9 positive signals, 6 negative signals) taking into account several important criteria that analysts typically assess.
This analysis is based on a composite scorecard that reflects Tesla's standing in various key financial metrics:
9 Positive Fundamentals
Superior Risk-Adjusted ReturnsTesla has delivered exceptional risk-adjusted returns compared to its sector peers over a 12-month hold period, placing it in the top quartile. This indicates that, despite some volatility, Tesla has performed well relative to other companies in its industry.
Positive Cash FlowTesla reported positive total cash flow over the past four quarters, highlighting its ability to generate cash from operations. This is a strong indicator of financial health and operational efficiency.
Positive Free Cash FlowThe company has also demonstrated positive free cash flow over the most recent four quarters, suggesting that it is able to reinvest in its business while still generating sufficient cash to fund growth.
Superior Return on Assets (ROA)Tesla has outperformed its peers in terms of return on assets, a metric that reflects the efficiency with which the company is utilizing its assets to generate profits. This places Tesla in the top quartile compared to its competitors.
Superior Capital UtilizationTesla has exhibited superior return on invested capital (ROIC) relative to its peers, indicating effective use of its capital to create value for shareholders.
High Market CapitalizationTesla is one of the largest companies in its sector, which typically provides a level of stability and resilience. A high market capitalization often indicates investor confidence and a leading market position.
Superior Earnings GrowthTesla's earnings growth has been impressive over the past five years, placing it in the top quartile among its sector peers. This growth has been a key driver of investor enthusiasm.
High Gross Profit to Asset RatioTesla ranks highly among its peers in terms of gross profit to asset ratio, an important metric for value investors. This shows that Tesla is generating strong profits relative to the assets it holds, a positive indicator for long-term growth.
Superior Return on Equity (ROE)Tesla's return on equity is better than that of most of its competitors, showing that the company is delivering superior value to its shareholders.
6 Negative Fundamentals
Overpriced Compared to Book ValueTesla's stock is trading at a higher valuation compared to its peers' median price-to-book ratio, suggesting that it may be overpriced relative to its book value.
Overpriced Compared to Earnings (P/E Ratio)Tesla's price-to-earnings ratio is higher than its peers' median, indicating that investors are paying a premium for its future growth potential. While this can be justified by Tesla's growth prospects, it also raises questions about the stock's current valuation.
High VolatilityTesla has exhibited significant price volatility over the past five years, which could be a concern for more risk-averse investors. The stock has been known for its sharp price fluctuations, making it suitable primarily for investors with a higher risk tolerance.
Overpriced on Cash Flow BasisTesla's stock is trading at a higher price-to-cash-flow ratio compared to its peers, suggesting that it may be priced above the sector's median in terms of its ability to generate cash flow. Investors should consider this when evaluating the stock's current value.
Highly LeveragedTesla's debt-to-equity ratio places it in the bottom half compared to its sector peers, indicating a higher level of leverage. While this may be a result of Tesla's aggressive growth strategy, high leverage can pose risks, particularly if the company faces challenges in meeting its debt obligations.
Overpriced on Free Cash Flow BasisTesla's stock price is trading at a premium when considering its free cash flow, suggesting that investors may be paying more for the stock than what is supported by its free cash flow generation. Caution is warranted for those considering new investments at current levels.
Outlook
Tesla's stock forecast shows a mixed outlook: while analysts are optimistic about the company's future growth prospects, particularly in the EV and clean energy sectors, the stock's high volatility and expensive valuation relative to book value, earnings, and cash flow could present challenges in the short term.
The company's strong fundamentals, including superior earnings growth, high return on assets, and positive free cash flow, paint a picture of a company capable of delivering strong long-term results. However, its high price-to-earnings ratio and leverage may concern some investors, especially those seeking a lower-risk profile.
While Tesla remains a highly attractive stock for growth investors, it is essential to consider the volatility and premium valuation. Analysts' ratings reflect broad optimism for the company's continued dominance in the EV market and its ability to innovate in other sectors. However, for those considering a potential investment, it is important to weigh the risk factors and ensure alignment with your investment strategy and risk tolerance.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
5 hours ago
- Globe and Mail
Is Tesla a Millionaire-Maker Stock?
Tesla 's (NASDAQ: TSLA) stock has already created plenty of millionaires. After all, its CEO, Elon Musk, is the world's richest man, due in large part to his 13% stake in the company. But past performance doesn't guarantee future success. It's unclear if Tesla still has what it takes to continue its bull run, especially as political pressure and electric vehicle (EV) industry weakness bite. Let's dig deeper to decide if Tesla's pivot to new opportunities, like robotics and self-driving technology, could help it overcome its weaknesses in its legacy automotive operations and its uncomfortably high valuation. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Tesla can't just be another automaker Cars have been around for over 100 years, which means the industry is incredibly mature, leading to low margins and stiff competition. For a time, Tesla had been able to buck these dynamics through high levels of vertical integration, economies of scale, and innovations like giga casting, which replaced complex assembled parts with large single-piece structures. But over time, the company's economic moat has eroded. The main challenge has been competition from low-cost Chinese EV rivals like BYD and legacy automakers like Ford and General Motors, which have leveraged their massive production infrastructure and dealership networks to scale rapidly. However, Musk certainly hasn't made things easier through his foray into U.S. politics, with his outspoken support for President Donald Trump. Taking a strong political position on one side or the other will inevitably rub a large portion of potenital buyers the wrong way. Tesla's first-quarter earnings demonstrate its deteriorating brand appeal. Revenue dropped 9% year over year to $21.3 billion, driven by a 20% collapse in the automotive segment, which represents 82% of sales. The collapse was worst in Europe. Sales on the continent slumped by a stunning 37.2%. The good news is that Tesla's U.S. operations have held up much better -- for now. Trump remains a wild card for Tesla So far, many American consumers appear to be keeping their politics separate from their car-buying decisions. U.S. first-quarter sales were down by a relatively modest 9%, according to data from Cox Automotive. However, it's unclear how much longer Tesla's honeymoon period will last. Musk has had public disagreements with Trump over his Big Beautiful Bill legislation, which is currently being debated in Congress. The bigger threat could come from Trump's legislation, which could strip away the $7,500 tax credit for EV purchases. The loss of government support could undermine Tesla's U.S. business, just as it is facing international weakness and higher costs from tariffs. CNN also reports that under the current language, support may remain for smaller EV companies like Rivian and Lucid, allowing them to maintain lower prices and eat away at Tesla's market share. Robotics and AI will make or break Tesla With a price-to-earnings (P/E) ratio of 186, Tesla stock is abnormally expensive for a business with declining sales and profitability. The valuation seems to price in the expectation of dramatic operational growth from its self-driving and robotics ambitions. There is some reason to be excited. Analysts at McKinsey & Company believe autonomous driving could generate $300 billion to $400 billion in revenue by 2035. Tesla seems to be an early leader in the opportunity, with plans to launch automated taxis in Austin, Texas this month. The company's focus on low-cost cameras and "computer vision" could give it an edge over rivals like Waymo (a subsidiary of Alphabet), which relies on pricey LiDAR and must source its vehicles from expensive third-party suppliers, adding cost and complexity to its operations. But while Tesla definitely has the potential to make more millionaires, success is already priced into its valuation. So, the downside risk seems to outweigh the upside right now -- especially considering the immense political uncertainty Musk has brought upon the company. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $377,293!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $37,319!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $659,171!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon. See the 3 stocks » *Stock Advisor returns as of June 9, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.
Globe and Mail
19 hours ago
- Globe and Mail
‘Sell TSLA Stock Now,' Says Wells Fargo
Tesla (TSLA) stock lost 3.9% yesterday, after Wells Fargo issued a warning saying that the EV maker's second-quarter performance may be weaker than expected, with free cash flow (FCF) turning negative for the first time since 2018. Analyst Colin Langan stated that vehicle deliveries are not showing signs of recovering and are, in fact, tracking flat compared to an already weak Q1. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Langan added that in order to meet the Wall Street estimate of 411,000 units for the quarter, Tesla would need to increase June deliveries by more than 50% compared to May. As a result, the firm now projects that Tesla's full-year deliveries will fall by 21% from last year. Tesla Faces Fundamental Challenges Ahead Notably, Wells Fargo expects the lower delivery volume to hurt Tesla's profit margins. Langan also pointed out that reduced income from Zero Emission Vehicle (ZEV) credits could be another drag on earnings. When considering these factors alongside Tesla's planned capital expenditures exceeding $11 billion and potential issues with working capital, Wells Fargo now estimates FCF burn of $1.9 billion for 2025. Moreover, the firm is worried about the lack of news regarding Tesla's long-awaited affordable EV, which many bulls believe is key to increasing sales in the second half. Additionally, Tesla's robotaxi plans are not impressing Wells Fargo, as the analyst notes that Full Self-Driving tests in Austin appear limited, slow, and closely monitored, which raises the risk that any accident during a rushed rollout could cause major setbacks. Owing to the above-mentioned reasons, Langan has a Sell rating on TSLA stock with a $120 price target, which implies 62.1% downside potential from current levels. What Is the Prediction for TSLA Stock? On TipRanks, TSLA stock has a Hold consensus rating based on 14 Buys, 12 Holds, and nine Sell ratings. Furthermore, the average Tesla price target of $286.14 implies 9.6% downside potential from current levels. Year-to-date, TSLA stock has lost 21.7%. See more TSLA analyst ratings
Ottawa Citizen
a day ago
- Ottawa Citizen
SpaceX's Starship explodes on test stand in yet another setback
Article content A SpaceX Starship rocket exploded on a test stand in Texas, adding to a series of setbacks to Elon Musk's space ambitions that include return trips to Mars. Article content The huge blast enveloped the craft as it stood upright at Starbase, before massive plumes of flames and smoke mushroomed into the night sky, video footage of the incident late Wednesday showed. The incident shook windows and rattled dishes, according to local media reports. Article content Article content Article content The rocket appeared to be undergoing a routine 'static fire test' of its engines. A static fire test is a pre-launch procedure in which a rocket's engines are fired while the rocket remains securely held down on the launch pad — essentially a rehearsal for the real launch, allowing engineers to test the rocket's systems without actually sending it into space. Article content Article content In a statement, SpaceX said the Starship 'experienced a major anomaly' during preparations for a 10th flight test. No one was injured and local residents aren't at risk, the company said. Article content The apparent destruction of the rocket extends the string of mishaps for a spaceship program that's central to NASA's plans to put American boots back on the moon — and also to Musk's grander ambitions to send cargo and people to Mars. The incident comes at a moment when Musk's business empire faces falling demand for Tesla Inc.'s electric vehicles, and after Musk engaged in a public feud with President Donald Trump. Article content Article content SpaceX holds contracts with NASA worth around US$4 billion to land the agency's astronauts on the moon using Starship, the world's largest and most powerful launch system. Article content Article content Last month, SpaceX's colossal Starship disintegrated mid-flight after spinning out of control. That loss was its third consecutive setback after flights in January and March were cut short just minutes after takeoff when the spacecraft exploded over the Gulf of Mexico, sending debris raining down from the sky and disrupting air travel. Article content January's explosion was caused by a propellant leak while the March failure was triggered by a hardware problem with one of Starship's Raptor engines, according to SpaceX. Article content Starship 10 hadn't been assigned an official launch date, and it's now unclear when the next flight will take place. Following the failure of the ninth launch, SpaceX said it would carry out a data review and make improvements to the rocket system before the next test.
