Our machine learning model has analysed the tesla share price from 2014 to come up the analysis till the end of 2026, If you look at the past predicting performance it has able to identify the trend fairly accurately. So the model believe the TESLA share price will continue to drop towards 156 level by May of 2026. So We are rating the Stock to “SELL”.
Our model has analysed fundamental and technical data to come up with the forecast into the future, it believe the Electric car demand is going to fade out. If we look at the secondary car market of EV, they are not even able to compare the drop in value compare to ICE ( Internal Combustion Vehicles). Main concern of the EV market among UK population is that 61% want to know the how long the batteries will last according to autotrader insight blog.
If we look at the Revenue Growth and Profitability of the TESLA, it is facing a margin pressure from Chinese automakers are undercutting tesla while selling most of their models without profit to capture the market, traditional dumping technique used by the Chinese companies ( EU launches investigation into Chinese EVs to protect European automakers). Even though that Tesla is profitable, they still reliant on the sales of the regulatory credits which affect the future growth potential.
If we analyse Free Cash Flow (FCF), even though tesla’s FCF is positive in recent years, it is being noted that the continuous investment into new facilities such as Gigafactories worldwide and R&D into new battery technologies has a greater strain on the bottom line. However, the Debt to Equity ratio is as of 24 the 30th June 2024 it is at 0.1108 which is very healthy for the company.
Sentiment and Market Expectations
Tesla’s stock has being very volatile due to the comments by the Elon Musk himself, Short-Sellers and Speculative trading. However, there are Tesla fan base customers who lives Made In American product. Long term investors are focused on the future growth of stock through Robotic Innovation such as robot Taxis which Elon musk had not delivered YET!!.
Tesla’s Financial Performance based on the (2023)
- Revenue Growth (YoY): +26%
- Net Income (YoY): +128%
- Gross Margins: 25%
- P/E Ratio: 71.7
- Debt to Equity: 0.1108
Final Verdict
We believe by May of 2026 the Tesla share price to fall to 156 level and the P/E ratio to come back down to 45.48. Unless TESLA, Inc introduce a Tesla Robot Taxi company along side with Tesla Robots for factory workers which would take the Tesla share to next level by absorbing the market shares from Uber and ABB. Our prediction is not without any error our RMSE is at 25.511.
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