Tesla Stock (NASDAQ:TSLA)
Analyst Craig Irwin questioned the current valuation of Tesla (NASDAQ:TSLA) before the company’s earnings report, which is due out after the closing bell. He said Elon Musk’s electric vehicle (EV) maker, whose stock has already dropped more than 50% in the past year, still has an “irrational” valuation.
According to Roth Capital Partners’ managing director and senior research analyst, who spoke with CNBC, TSLA will feel the effects of increased competition in the EV industry, particularly from legacy automakers.
“Since Tesla stock price rose dramatically, it could not be maintained indefinitely. They are not independent entities, “he said.
Late in the 2010s, Tesla (NASDAQ:TSLA) cornered a sizable portion of the electric vehicle (EV) market in the United States. Having brought attention to EVs, the company faces increased rivalry from EV-specific startups and established automakers stepping up their electric competitiveness in recent years.
New entrants like Lucid Group, Rivian, and Polestar Automotive, as well as expanded EV production from established companies like General Motors, Ford, and Toyota, have all contributed to TSLA’s heightened competitiveness in the market.
While Tesla deserves much praise for pioneering the current EV industry, Irwin predicts that the firm will fail in the face of intensifying competition. That’s why his current price objective of $85 per share and Hold recommendation stand.
He said, “Valuation needs some rationale, some logic.” “Tesla has a lesser market valuation than Toyota, yet it offers no advantages over Toyota. Honestly, I don’t think that’s a very reasonable assessment.”
Tesla stock price has dropped by almost 55% over the previous 12 months. However, it has gained 29% so far in 2023. The stock price fell more than one percent on Wednesday, falling below $142 during the trade.
After Wednesday’s market closes, Tesla will announce its quarterly profits.
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