Tesla Motors (NASDAQ: TSLA) has faced a challenging 2024, with its stock declining nearly 21% year-to-date. After peaking in July, Tesla’s shares have dropped by 16%, driven by a combination of disappointing quarterly earnings, product delays, and operational challenges.
As the electric vehicle (EV) leader navigates these issues, Wall Street analysts have offered a broad range of price predictions for the next 12 months, reflecting the uncertainty surrounding the company’s future.
As of the latest close on August 12, TSLA stock was trading at $197.49 per share, following a decline of 1.25% in the last 24 hours.
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Key drivers behind Tesla’s stock performance
Tesla’s recent stock performance has been influenced by multiple factors, both operational and strategic.
In July, Tesla’s second-quarter earnings report revealed only a 2% year-over-year revenue increase to $25.5 billion, while net income plunged by 45%, raising concerns about the company’s financial health as margins shrank to 18%.
Adding to investor anxiety, Tesla has faced significant delays in its product roadmap, notably with the highly anticipated robotaxi. The unveiling of Tesla’s robotaxi, initially scheduled for August 2024, has been delayed until October. These setbacks have fueled investor uncertainty about the company’s ability to innovate and deliver on its promises.
Compounding these issues, Tesla has also been grappling with quality control problems. In August 2024, the company recalled 1.6 million vehicles in China due to software-related issues, a move that has added pressure to the stock.
Moreover, Tesla continues to face regulatory scrutiny over its Autopilot system, which has been linked to several accidents.
The U.S. National Highway Traffic Safety Administration (NHTSA) has closed one investigation into Tesla’s Autopilot but opened another, questioning whether recent software updates sufficiently address safety concerns, according to sources.
Meanwhile, Tesla is also battling intensifying competition from Chinese automakers like BYD (SHE: 002594) and XPeng (NYSE: XPEV), which are challenging the company on both price and technology, particularly in the autonomous driving space.
Analyst price predictions reflect mixed signals
In light of these challenges, Wall Street analysts have issued a broad spectrum of price targets for Tesla. The consensus among 31 Wall Street analysts is more moderate, with an average 12-month price target of $211.46.
This suggests a potential 7.07% upside from the current price of $197.49.
On the optimistic end, Global Equities Research has set a 12-month price target of $400, suggesting a potential 100% upside.
This bullish outlook is based on strong demand for Tesla’s vehicles, particularly the Model X, Y, S, and 3, supported by a $7,500 EV credit available at the point of sale.
On the other hand, Roth MKM has issued a more bearish forecast, with a 12-month price target of $85, pointing to recent operational disappointments, including delays in product launches and weaker-than-expected financial performance.
This target represents a significant potential downside of over 50% from current levels, reflecting deep skepticism about Tesla’s near-term prospects.
Investors should approach Tesla with caution, given the broad range of price targets and the inherent risks associated with the stock.
While the potential for significant upside exists, particularly if Tesla successfully executes its product launches and technological advancements, the downside risks are also substantial, especially if the company continues to struggle with profitability and operational execution.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
