/A%20Tesla%20Cybertruck%20with%20visible%20bullet%20impacts_%20Image%20by%20Karolis%20Kavolelis%20via%20Shutterstock_.jpg)
Tesla (TSLA) cannot seem to escape controversy, as frustration over CEO Elon Musk’s involvement in the U.S. government spills into his business empire. The public backlash continues to mount as Musk, in his role as a top advisor to President Donald Trump, spearheads the administration’s job-slashing initiative under the Department of Government Efficiency.
Compounding Tesla’s troubles, the company is now recalling over 46,000 Cybertrucks. This is because a cosmetic exterior trim panel poses a serious risk, as it can “delaminate and detach from the vehicle,” potentially turning into a road hazard and “increasing the risk of a crash.”
Recalls are a standard part of the automotive industry, often triggered by investigations. In 2024 alone, the National Highway Traffic Safety Administration reported 1,073 safety recalls impacting over 35 million vehicles. These events rarely impact margins, as automakers account for such costs in warranty provisions.
However, the Cybertruck has been recalled eight times since its late 2023 debut. The figure raises eyebrows, even if investors typically do not track recalls by individual models. Given this backdrop, let us assess the path forward for TSLA.
About Tesla Stock
Based in Austin, Texas, Tesla (TSLA) has come a long way since its IPO in 2010. What started as a bold vision has grown into an $800 billion powerhouse, setting the standard for electric vehicles (EV). But its influence stretches beyond just cars. The company is shaping the future of energy and mobility with groundbreaking advancements in battery storage, solar energy, and artificial intelligence (AI)-driven autonomous technology.
Challenges have been plenty for the company. However, it remains a force to be reckoned with. Over the past 52 weeks, TSLA has surged nearly 58%.
From a valuation standpoint, TSLA currently trades at 92.56 times forward earnings and 7.78 times sales, a premium over the industry averages. Yet, considering Tesla’s own five-year averages, this is a rare discount.
Tesla Misses on Q4 Earnings
Tesla’s fourth-quarter 2024 earnings report, released on Jan. 29, fell short of analysts’ expectations despite the company setting a record in vehicle deliveries. Revenue climbed 2.1% year-over-year to $25.7 billion but failed to meet Wall Street forecasts of $27.1 billion.
The company delivered 495,570 vehicles during the quarter, marking a 2.3% annual increase. However, downward pressure on average selling prices, driven by aggressive pricing strategies and evolving financing options, weighed on revenue. As a result, the automotive segment brought in $19.8 billion, an 8% decline from the prior year’s quarter.
Tesla’s income from operations dropped 23.3% to $1.6 billion but adjusted net income showed resilience, rising 3.3% to $2.6 billion. Adjusted EPS edged up 2.8% annually to $0.73, although it missed analysts’ estimate of $0.77.
Elon Musk, however, has no shortage of confidence in Tesla’s future. Calling 2026 “epic” and predicting 2027 and 2028 to be “ridiculously good,” he has painted a vision of the company’s dominance. He claims Full Self-Driving (FSD) will become the “largest asset value increase in human history” and boldly envisioned the annual production of thousands of Optimus humanoid robots within a few years. Investors responded, pushing TSLA higher after management vowed a return to growth.
Looking ahead, Tesla expects its energy storage business to soar, forecasting a 50% increase in deployments for the upcoming year. The Cybertruck’s mass production is on track for 2026, and vehicle sales growth is targeted to be between 20% and 30%, provided economic conditions remain favorable.
Analysts project Tesla’s fiscal 2025 first-quarter EPS to jump 45.7% year over year to $0.51, with 2025 EPS anticipated to rise 20.6% to $2.46. Looking further ahead, the 2026 bottom line is expected to surge by another 35.8% to $3.34 per share.
What Do Analysts Expect for Tesla Stock?
Despite recent struggles, TSLA continues to command strong support on Wall Street. Commerce Secretary Howard Lutnick recently urged Americans to buy Tesla stock. TD Cowen analyst Jeff Osborne raised the price target from $180 to $388 while maintaining his “Buy” rating. Meanwhile, Barclays analyst Dan Levy kept an “Equalweight” rating and maintained a $325 target.
The consensus rating on TSLA is “Hold,” reflecting a mixed outlook. Among 40 analysts covering the stock, 15 maintain a “Strong Buy,” three recommend a “Moderate Buy,” 12 suggest to “Hold,” while 10 advise a “Strong Sell.”
The average price target of $338.94 represents potential upside of 36.3%, while the Street-high target of $550 suggests an even greater leap of 121.1% from current levels.
