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Can Tesla Stock Fall To $300?

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Our multi-faceted evaluation indicates that it might be an appropriate moment to divest from TSLA stock. In general, we hold a negative outlook on the stock, and a price target of $300 seems plausible. We perceive there is a roughly equal balance of positives and negatives in TSLA stock considering its general Moderate operational performance and fiscal health. Separately, check out NVIDIA vs. AMD: Which Stock To Bet On?

However, considering its Very High valuation, we regard Tesla stock as Unattractive.

Presented below is our evaluation:

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Let’s delve into the details of each of the evaluated factors. Firstly, for a quick background: With a $1.4 Tril market capitalization, Tesla offers electric vehicles and regulatory credits within the automotive sector, in addition to designing, manufacturing, installing, selling, and leasing energy production and storage solutions.

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[1] Valuation Appears Very High

This table showcases how TSLA is valued in comparison to the broader market. For additional details, see: TSLA Valuation Ratios

[2] Growth Is Unstable

  • Tesla has experienced its top line increase at an average rate of 9.3% over the past 3 years
  • Its revenues have dropped -1.6% from $97 Bil to $96 Bil within the last 12 months
  • Moreover, its quarterly revenues rose 11.6% to $28 Bil in the latest quarter from $25 Bil a year earlier.

This table highlights how TSLA is growing relative to the broader market. For further details, see: TSLA Revenue Comparison.

[3] Profitability Seems Weak

  • TSLA’s operating income for the last 12 months was $4.9 Bil, indicating an operating margin of 5.1%
  • With a cash flow margin of 16.5%, it produced nearly $16 Bil in operating cash flow over this time frame
  • During the same period, TSLA generated around $5.1 Bil in net income, suggesting a net margin of approximately 5.3%

This table demonstrates TSLA’s profitability compared to the broader market. For more information, see: TSLA Operating Income Comparison

[4] Financial Stability Seems Very Strong

  • TSLA Debt amounted to $14 Bil at the close of the most recent quarter, while its current Market Cap is $1.4 Tril. This results in a Debt-to-Equity Ratio of 1.0%
  • TSLA Cash (including cash equivalents) constitutes $42 Bil of $134 Bil in total Assets. This equates to a Cash-to-Assets Ratio of 31.1%

[5] Downturn Resilience Is Weak

TSLA has performed worse compared to the S&P 500 index during several economic downturns. We evaluate this based on both (a) the extent to which the stock declined and, (b) how swiftly it recovered.

2022 Inflation Shock

  • TSLA stock plummeted 73.6% from a peak of $409.97 on 4 November 2021 to $108.10 on 3 January 2023, compared to a peak-to-trough decline of 25.4% for the S&P 500.
  • However, the stock entirely regained its value to its pre-Crisis peak by 11 December 2024
  • Thereafter, the stock surged to a high of $489.88 on 16 December 2025, and presently trades at $447.20

2020 Covid Pandemic

  • TSLA stock dropped 60.6% from a peak of $61.16 on 19 February 2020 to $24.08 on 18 March 2020, while the S&P 500 experienced a peak-to-trough decline of 33.9%.
  • Nonetheless, the stock fully recovered to its pre-Crisis peak by 8 June 2020

However, the risk is not confined to significant market crashes. Stocks can decrease even in favorable markets—consider events like earnings reports, business updates, and changes in outlook. Check TSLA Dip Buyer Analyses to explore how the stock has bounced back from sharp declines in the past.

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