Although Tesla (NASDAQ: TSLA) missed the Q4 2024 consensus delivery target, an analyst has projected that the stock will likely soar by 35%, maintaining that the firm still has significant growth opportunities.
Notably, Tesla has recently faced volatility after its impressive run in the fourth quarter of 2024, built on post-election optimism.
At the close of the January 3 trading session, TSLA was valued at $410.44, up 8.22% for the day. Year-to-date, the electric vehicle stock has rallied over 5%.
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Analyst revises Tesla stock price
Regarding the new stock price target, Canaccord Genuity analyst George Gianarikas has raised the valuation of TSLA from $298 to $404, an upside of 35%, while maintaining a ‘Buy’ rating. The new target reflects a 40-times multiple on the firm’s updated 2027 non-GAAP EPS estimate of $10.11, up from the previous estimate for 2026.
“Despite weaker-than-expected deliveries, we are sticking with our BUY and raising our target from $298 to $404,” the analyst stated.
Despite weaker-than-expected vehicle deliveries, Gianarikas expressed optimism about Tesla’s future, highlighting its growth opportunities in electric vehicles (EV), autonomy, artificial intelligence (AI), energy storage, and robotics.
He justified the higher multiple by positioning Tesla alongside mega-cap tech stocks like Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Meta (NASDAQ: META), Microsoft (NASDAQ: MSFT), and Nvidia (NASDAQ: NVDA), trading at a median of 23 times 2027 EPS but having slower revenue growth than Tesla.
This expert outlook comes after Tesla missed analysts’ delivery estimates despite the bullish sentiment around CEO Elon Musk’s relationship with President-elect Donald Trump. Notably, the Texas-based firm’s global annual sales declined for the first time in at least nine years, with a 2.3% increase in Q4 failing to offset a slow start to 2024.
Despite offering 0% financing, free charging, and low-priced leases, Tesla delivered 495,570 vehicles in Q4, bringing total annual deliveries to 1.79 million. This marked a 1.1% drop from 2023’s 1.81 million, as demand for EVs slowed globally.
What next for Tesla stock
To this end, banking giant JPMorgan (NYSE: JPM) cautioned that Tesla’s Q4 sales and production figures, while in line with its estimates, fell short of consensus and pose risks to 2024 earnings, which have already dropped 36%.
The firm noted that regulatory changes, including the expiration of the Clean Vehicle Credit and reduced zero-emission vehicle credits, could cost Tesla $3.2 billion, or 40% of its 2024 EBIT estimate. As a result, JPMorgan maintained an ‘Underweight’ rating on Tesla, with a $135 price target.
On the other hand, Dan Ives from Wedbush maintained that Tesla stock remains worth buying, arguing that the company has more to offer than just being an EV firm.
“We have never viewed Tesla simply as a car company. <…> Instead, we have always viewed Musk and Tesla as leading disruptive technology global players. <…> And the first part of this grand strategic vision has taken shape,” Ives said.
William Stein of Truist Securities noted that Tesla will face challenges in selling vehicles in the coming months and anticipates that additional discounts used to drive sales will impact its financial performance.
Looking ahead, all eyes are on how Tesla will adapt under the Trump administration, particularly in areas like autonomous driving and AI.
Reports indicate that the Trump transition team plans to prioritize creating a new regulatory framework for self-driving cars at the Transportation Department, which could relax current rules. Indeed, this aligns with Musk’s push to regulate self-driving at the Federal level rather than the current state level.
While the potential removal of EV subsidies could affect Tesla’s profit margins, it may also give the company an advantage over competitors, allowing it to solidify its market position. However, the impact of these policies remains uncertain, leaving Tesla’s stock susceptible to speculative market movements.
Tesla’s stock headwinds
Tesla faces several headwinds amid this outlook, especially in key markets like China. Notably, the EV maker achieved record sales of over 657,000 vehicles in China in 2024, driven by discounts, reflecting an 8.8% year-over-year increase.
However, competition remains intense, with China’s BYD reporting a 12.1% rise in EV sales, reaching 1.76 million units.
Tesla also faces significant challenges in the U.S. and Europe, including reduced subsidies and shifting market dynamics. How the company navigates these challenges will be crucial in determining its potential to reach a $500 target by 2025.
Featured image via Shutterstock
