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Tesla, Inc. (TSLA), headquartered in Austin, Texas, has pioneered battery-electric vehicles and is renowned for its disruptions in the automobile and sustainable energy space. Valued at $567.49 billion by market cap, the company designs, develops, manufactures, and sells fully electric vehicles, energy generation and storage systems.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and TSLA fits right into that category. TSLA is accelerating the world’s transition toward sustainable energy through its products and solutions. TSLA is the top automobile company by market cap in the S&P 500 Index ($SPX).
The EV giant has fallen 40.5% from its 52-week high of $299.29, which it hit on Jul. 19, 2023. Shares of TSLA are down 1.3% over the past three months, underperforming the broader Nasdaq Composite’s ($NASX) 7.1% gains over the same time frame.
Longer term, TSLA is down 21.5% over the past year and 29% in 2024. By contrast, NASX is up 14.4% on a YTD basis and 29.4% over the past 52 weeks.
TSLA’s recent price trend looks bullish, as the stock has been trading above its 50-day moving average since mid-May. However, the stock has been trading below its 200-day moving average since early January, indicating a long-term bearish price trend.
On May 22, TSLA shares closed down more than 3% after the European Automobile Manufacturers’ Association reported TSLA’s April Eurozone registrations fell 2.3% to 13,951 vehicles, a 15-month low.
The stock rose more than 12% in the session after the company reported its Q1 results. The company said it will accelerate the launch of less-expensive EVs as soon as this year. TSLA’s EPS came in at $0.45, missing the consensus estimate of $0.51. Similarly, its revenue declined 9% year over year to $21.30 billion, below Wall Street expectations of $22.15 billion. This was the worst annual revenue decline for the company since 2012. During its earnings call, the company stated that its volume growth rate may be notably lower than last year's.
TSLA’s overall underperformance can be attributed to the softening of demand for EVs worldwide. The company’s troubles also stem from intensifying competition in the Chinese market, prompting the carmaker to undertake price cuts that affected margins.
To emphasize the stock’s underperformance, it has underperformed rival Ford Motor Company (F) as well. F stock has declined 11.9% in the past 52 weeks and 1.7% on a YTD basis.
With its recent underperformance compared to the NASX, analysts continue to remain cautious about TSLA’s prospects. The stock has a consensus rating of “Hold” from the 32 analysts covering it, but the mean price target of $176.45 is a marginal discount to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
