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TSLA | TESLA is OvervaluedTesla, Inc.'s second quarter earnings confirm our view that the stock is one of the most overvalued stocks in the market. Tesla's stock has been rising this year amid a sudden shift in overall market sentiment, with many investors now pricing in a soft-landing scenario after a brutal past year of Federal Reserve rate hikes. But the shift in market sentiment doesn't change the fact that Tesla's stock fundamentals are completely disconnected from reality. Tesla is a terribly overvalued stock that we think is worth closer to $26 per share instead of its current price of about $290 per share. While Tesla is profitable, its profits are nowhere near the levels needed to justify its current valuation. We recognize that Tesla's business generates an impressive return on invested capital (ROIC), which is a key measure of profitability, especially for an automaker. However, that ROIC is already declining in the trailing-twelve-month (TTM) period. Using our reverse discounted cash flow (DCF) model, we find that for the stock to have any upside at current levels, Tesla must improve its ROIC to levels not achieved by even the most profitable businesses in the world . Figure 1 shows Tesla's historical ROIC along with the future ROIC implied by its current stock price. We provide the assumptions behind this DCF scenario later in this report. Tesla's latest earnings continue to show that it is not immune to competitive challenges and will likely see lower profitability in the future. But, its valuation implies the opposite. Any investor with fiduciary duties should be aware of the growing disconnect between Tesla's current fundamentals and the future fundamentals implied by its stock price. Even in an optimistic future cash flow scenario, shares could trade as low as $26/share. All the details are below. Supply Constrained Argument Is Gone: Bulls have long argued that demand for Tesla vehicles has always exceeded the supply of vehicles. However, Tesla's multiple price cuts in 2023, along with its lackluster production levels through the first half of 2023, raise questions about just how much demand there is for Tesla vehicles, especially amid competition from rivals Ford (F), General Motors (GM) and virtually every other automaker. Q2 2023 marks Tesla's fifth consecutive quarter in which vehicles produced were greater than vehicles delivered. Tesla is no longer selling every vehicle it can make. Should demand for EVs slow, Tesla could find itself with higher than wanted inventory levels, which could lead to further price cuts and additional pressure on already falling margins. Continued Cash Burn: Despite Tesla's top line growth, it continues to burn massive amounts of cash. Over the past five years, Tesla has burned a cumulative $4.2 billion in free cash flow (FCF), including $3.6 billion over the trailing-twelve months (TTM) alone. Tesla has generated negative FCF in all but one year (2019) of its existence as a public company. Margin Decline: Tesla's "GAAP gross margin" was 18.2% in 2Q23, down from 19.3% in 1Q23 and 25.0% in 2Q22. 2Q23's GAAP gross margin was below expectations of 18.7% and remains at its lowest level since 4Q20. Tesla's operating margin is also moving the wrong direction as it scales up. After selling 211 thousand more vehicles in 2Q23 compared to 2Q22, Tesla's reported operating margin fell 493 basis points YoY in 2Q23. Tesla noted in its press release that reduced average selling prices were one of the items that impacted margins in the quarter. We would expect Tesla's margins to fall further as competition limits pricing power across the industry. While Tesla has rapidly ramped up vehicle production and deliveries, its market share must increase almost exponentially to justify the expectations baked into its stock price. However, as it stands, Tesla holds a meager share of the global auto industry, and its share of the EV market ranks behind incumbents across Europe and China. In Europe, based on sales from May 2023, Tesla holds a 12% share of the EV market, much lower than VW Group (20%) and Stellantis (STLA) at (14%).In China, also based on sales from May 2023, Tesla holds 9% of the EV market compared to a staggering 38% share for top competitor BYD. Bulls have long argued that Tesla isn't just an automaker, but rather a technology company with multiple verticals such as insurance, solar power, housing, and, yes, robots. We've long refuted these bull dreams. Regardless of the promises of developing multiple business lines, Tesla's business remains concentrated in its auto segment. Auto revenue accounted for 86% of Tesla's TTM revenue as of 2Q23.Tesla can no longer enjoy its first mover advantage as many other major automakers are producing electric vehicles. These competitors have more experience in auto production and more resources and cash flow than Tesla to invest in the electric vehicle market. Tesla is at risk of losing market share to its competitors in the electric vehicle space and its stock price is currently not reflecting that, which is a major risk for investors. Since bottoming out at the beginning of the year, the stock has come up almost 200%, stopping just shy of $300. One could say the recent selloff is due to the earnings, but technical analysis would have suggested that a selloff was due even before the earnings. Firstly, we can see that a significant bearish divergence has been building in the RSI since June. Furthermore, we have been nearing an important area of trade as highlighted by the red rectangle. The $300 level has been a key area of trade, and you’d expect to see some resistance. So if a pullback has begun where can we expect it to end? As I see it, we have formed an initial ABC structure from the lows in wave 1 of a five-wave impulse. This means that wave ii could now take us down to the 61.8% retracement of this rally, which lands us at $198. We can see that this is also a very important area of support, as shown by the Visible Range Volume Profile. And, of course, we have the 200 day Moving Average offering support around this level, too.
NASDAQ:TSLA
by moonypto
Elliot Wave Chart Analysis for Tesla, Inc. (TSLA)This chart presents an Elliott Wave analysis of Tesla, Inc.'s weekly stock price, highlighting key wave patterns and potential scenarios: Wave Structure: The chart indicates two primary corrective phases labeled W and Y. The first corrective phase (W) shows an ABC correction, marked with internal wave structures. The second corrective phase (Y) also presents an ABC pattern with further internal structures. An X wave connects the W and Y corrective phases, suggesting a complex correction pattern. Corrective Patterns: Within both corrective phases (W and Y), the chart uses Elliott Wave labels (A, B, C) to detail the internal structure of the corrections. Wave (B) in phase (Y) appears to have completed a sharp upward move, potentially indicating the end of the corrective wave. Trend Lines and Key Levels: A red diagonal trend line connects significant peaks, indicating potential resistance. The price level of 299.29 USD is labeled "INVALID ABOVE," suggesting that a move above this level would invalidate the current bearish outlook. The price is currently at 263.26 USD, marking a crucial decision point. Current Price Action: The chart shows the price approaching the critical 299.29 USD level, testing the upper boundary of the potential corrective wave. Trading Ideas: Bearish Scenario: Fake Out and Five Waves Down If the price is rejected at or below the 299.29 USD level, it could confirm a fake-out scenario. This would likely lead to a five-wave down structure, targeting lower support levels and indicating a significant decline. Traders might consider short positions below 263.26 USD, with stop-loss orders above 299.29 USD to manage risk. Bullish Scenario: Running Flat Completion If the price breaks and sustains above the 299.29 USD level, it could suggest the completion of a running flat correction. This scenario would favor a bullish continuation, potentially leading to new highs as the price moves out of the corrective phase. Traders might look for long positions above 299.29 USD, targeting higher resistance levels for potential gains. Conclusion: Monitor the 299.29 USD level closely, as it is critical for determining the next major move. A break above this level favors a bullish scenario, while a rejection could lead to a bearish continuation.
NASDAQ:TSLAShort
by Aparra7
tsla → is it the end of correction?!hello guys... I published before this analysis: I believe the target of the short position was 127$! but now the price made a three-drive pattern and showed us a manipulated area! I think if the price comes higher than 185$ it will mean the correction is done! let's see what happens! ___________________________ ✓✓✓ Always do your research. ❒❒❒ If you have any questions, you can write them in the comments below, and I will answer them. ❤︎ ❤︎ ❤︎And please don't forget to support this idea with your likes and comment
NASDAQ:TSLALong
by melikatrader94
5
Tesla gains approval for government vehicle procurement in ChinaTesla Inc. has received approval for its Model Y vehicles manufactured in Shanghai to be included in the new vehicle procurement batches for official use by government and public organisations in Jiangsu Province, China. This marked a significant development for Tesla, indicating strong support from the Chinese government. It comes after assurances that Tesla's data collection practices meet local requirements following a data centre establishment and plans to release Full Self-Driving software in the PRC this year. The recent engagements between Tesla CEO Elon Musk and Chinese Premier Li Qiang also seem to have contributed to bolstering the company's position amid the ongoing US-China technology tensions. This new allowance for government agencies to purchase Tesla cars could boost Tesla's sales and presence in the Chinese market. Technical analysis of Tesla Inc (NASDAQ: TSLA) Analysing the potential trading opportunities based on Tesla's stock performance: Timeframe : Daily (D1) Current trend : the stock is currently in an uptrend, demonstrating strong growth potential Resistance level : the last known resistance at 198.85 USD has been surpassed, and no new resistance has been established Support level : 179.65 USD Potential downtrend target : if a downtrend initiates, the downside target could be set at 160.00 USD Short-term target : if the uptrend continues, the next short-term target could be around 310.00 USD upon rebounding from the resistance level Medium-term target : with sustained positive momentum, the stock price might rise to approximately 345.00 USD Investors should closely monitor Tesla's performance, especially after these new developments in China, as they could significantly impact the company's stock valuation and market strategy. — Ideas and other content presented on this page should not be considered as guidance for trading or an investment advice. RoboMarkets bears no responsibility for trading results based on trading opinions described in these analytical reviews. The material presented and the information contained herein is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law L. 87(I)/2017 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments.
NASDAQ:TSLA
by RoboMarkets
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NASDAQ:TSLA
by InvrsROBINHOOD
Will Tesla Double in Price This Year, Obliterate Bill GatesIt's gone a week or so, since Elon Musk gave Bill Gates advance warning last Tuesday not to truffle with him again. The Microsoft cofounder faces annihilation if he makes any further attempt to bet against Tesla. That’s because Musk believes he will have transformed the carmaker into an AI colossus worth a staggering $30 trillion as soon as Tesla completes its pivot from selling EVs first and foremost to operating a lucrative fleet of robo-taxis and humanoid robots. “Once Tesla fully solves autonomy and has Optimus in volume production, anyone still holding a short position will be obliterated,” he posted to social media on Tuesday. “Even Gates.” Indeed Tesla stocks recently jumped, erased all the 2024Y losses, to print new 6Mo highs. 52-weeks SMA has been passed through also, while Daily RSI(14) skyrocketed to 85+ area. Tesla is Dressed To The Nines. This English idiom meaning “The highest degree of perfection.” Literally, the idiom means “Dressed like a brand new man.” Btw, in financial circles, this is how they speak about assets after a Super Combo rally of continuous growth in shares or indices , after nine consecutive growing bars in a row (daily, weekly, monthly time frames). That’s exactly how many (nine) daily growth bars in a row were recorded on the eve of July 8, 2024 in Tesla shares. In nowadays even Tesla printed not 9-day but even 10-day winning streak, with the stock soaring 44% over the period. Prior to the rebound, shares were down 27% year-to-date, but they're now back in positive territory for the year, up nearly 6%. And it marked the second biggest combo rally in Tesla shares after May-June 2023, when the stock rose continuously for 13 (!) trading sessions in a row. It is worth to note that last time, after reaching “The Super Combo” in Tesla shares, Up/Down price deviations over the next 12 months were approximately equal, approximately 30-35 percent in each direction. Who knows, how many extra days will last this series right now, and where this soap opera ends. It's clear Mr. Elon wants to zap investors stress fast.
NASDAQ:TSLA
by Pandorra
Can Tesla Get Back to Even? What I'm WatchingI still can't believe that, back in April, Tesla was down 43% since the start of the year. It's been ages since we've seen a drop like that for Tesla. I circled that point on the chart with a red circle. Also, the yellow and orange lines are the 50 and 100 day moving averages, about to cross and seem to be turning upward. Fast forward to now, and Tesla has bounced back, down just 6% since the year's start. If Tesla goes green on the year... watch out. There are a number of reasons why Tesla might be turning the corner, and that especially seems to be its recent delivery numbers. But, before we go there, what really caught my eye is how quickly companies like NVIDIA have recently outpaced Tesla over the last 6+ months. I just can't remember such a hot stock becoming "left behind" in such a short period of time. Both TSM and Broadcom also passed Tesla rather quickly - also semiconductor stocks. Now, why did Tesla pop recently? As many of you know, Tesla reported 443,956 deliveries in Q2, slightly above Wall Street's expectations of around 439,000 units. There's nothing quite like beating Wall Street and proving them wrong. But let's not forget that Wall Street can spin the numbers to fit their narrative. This delivery figure is still a 4.8% decrease from the same quarter last year, hinting at Tesla's resilience. However, personally, I'm more intrigued by Tesla's product mix and the new projects they're working on. That's where the real story is. And I think this comeback is just the start of that.
NASDAQ:TSLA
by scheplick
Tesla: BE CAREFUL We are currently at the 0.5 / golden ratio resistance levels, the recent spike was the market taking out late shorts. Notice that we are about to hit the last local high as well. I caution anyone to buy here as we may be running out of fuel. Looking at the ichimoku the general trend is also bearish at the moment. I would suggest anyone bullish to wait until this level is flipped, let price break through this resistance and ideally retest this level as support. Don't get sucked into the hype, the market is still generally bearish and inflation is still high. The market may have some relief but wait for confirmation
NASDAQ:TSLA
by sachu_blessyou
1
Should we buy more TSLA(?) - July 5TSLA (Tesla Inc.) 30-minute chart, let's examine the key elements and indicators visible in the screenshot: Time Frame: The chart is on a 30-minute time frame for TSLA on NASDAQ. Trend Lines: An upward trend line is present, indicating a recent uptrend. Candlestick Patterns: The recent candlesticks show a strong upward movement followed by some consolidation. Volume Profile: The volume profile on the right shows areas of high trading activity, which can act as support and resistance levels. Indicators: MACD is visible at the bottom of the chart. Support and Resistance Levels: Current Price: ~$251.03 Key Support: Around $249.89 and $236.31 Key Resistance: Around $253.68 Analysis: Trend: The current trend is upwards, as indicated by the ascending trend line and recent price action. Volume Profile: The volume profile suggests significant activity around $251.03 and $249.89. These levels often act as support or resistance due to the high volume of trades occurring there. Support Levels: First Support: $249.89 - This is a key level from the volume profile and also aligns with recent consolidation. Second Support: $236.31 - This level is closer to a previous low and another significant volume node. Resistance Levels: First Resistance: $253.68 - The recent high and an area where price might face selling pressure. Second Resistance: $260 - Not explicitly visible in the chart, but a round number and psychological resistance. Indicators (MACD): The MACD is showing a bullish trend with the MACD line above the signal line, which indicates upward momentum. However, watch for any divergence or crossovers that could indicate a change in momentum. Projection for July: Upside Potential: If the price continues to follow the ascending trend line, it is likely to test the first resistance at $253.68. A break above this level could lead to further upside towards $260. Downside Potential: If the price fails to hold the first support at $249.89, it could test the second support at $236.31. Breaking below this level might indicate a shift in trend. Entry/Exit Suggestions: Swing Trading: Entry: Consider entering a long position if the price pulls back to around $249.89 and shows signs of support (e.g., bullish candlestick patterns or increased volume). Exit: Target the first resistance at $253.68. If the momentum is strong, consider holding for a move towards $260. Stop-Loss: Place a stop-loss below $249.89, around $248, to manage risk. Conclusion: The current market sentiment for TSLA is bullish with an uptrend in place. For swing trading, look for entries around support levels with targets at resistance levels. For scalping, focus on quick trades based on breakouts and price action around key levels. Always manage risk with appropriate stop-losses.
NASDAQ:TSLALong
by BullBear-Insights