Tesla (TSLA, Financial) has experienced significant stock price fluctuations, remaining far from its all-time high. The stock has shown an erratic pattern, rising 8% one day and falling the next. Over the past ten trading days, TSLA's price dropped five times, with an overall increase of about 2%. Recently, it declined by 3.4% to close at $413.82, while the S&P 500 and Dow Jones Industrial Average both fell by approximately 0.2%.
TSLA is establishing a new trading range, with recent prices between $380 and $480, significantly higher than the $270 resistance level from the past year. However, investors are seeking catalysts to influence perceptions of valuation and earnings growth. Currently, TSLA trades at about 130 times the expected 2025 earnings.
Potential catalysts include the simplification of autonomous taxi service regulations and the introduction of lower-priced models, both anticipated by the market. Gary Black, co-founder of Future Fund Active ETF and a TSLA shareholder, suggests that licensing Tesla's autonomous technology to other automakers could validate its technology and provide an additional revenue stream. Additionally, Tesla's humanoid robots, if sold by late 2025 or early 2026, could significantly impact TSLA's stock price, though Wall Street has yet to fully incorporate this into their earnings models.
Conversely, potential negative catalysts include the possible revocation of the $7,500 federal EV tax credit under the Inflation Reduction Act, which could make EVs more expensive. High interest rates and slowing EV sales growth also pose challenges, with U.S. EV sales in 2024 growing only 7% compared to 46% in 2023.
Wells Fargo analyst Colin Langan rates TSLA as "sell" with a target price of $125, while Black's target is $380, highlighting a significant valuation gap.
