Zinger Key Points
- Concerns over Tesla stock's declining growth and high PE ratio, juxtaposed with Toyota's superior financial metrics, highlight a contrast.
- Recent reports suggesting Tesla's shift away from low-cost vehicle plans raise questions about its strategic direction.
- Discover Fast-Growing Stocks Every Month
Tesla Inc TSLA stock was trading lower, Friday, after reports suggested that Tesla has shelved plans for a low-cost vehicle.
The report also suggested that the company may be opting instead to focus on self-driving technologies. CEO Elon Musk refutes these claims, challenging the credibility of the reports.
More Details Here: Tesla Reportedly Scraps Low-Cost Car Plans, Elon Musk Denies Story
Tesla stock was trading 3.6% lower at $164.88 at the time of publication Friday.
Redditor Warns About Tesla’s Growth Rate
In a recent Reddit post by user pravchaw on r/ValueInvesting, concerns were raised regarding Tesla stock’s declining growth trajectory and high price-to-earnings (PE) ratio. A comparison with Toyota Motor Corp TM highlighted significant differences.
Tesla stock is looking precarious with declining growth and high PE
| Company | Symbol | Current Price | Market Cap ($M) | P/E Ratio without NRI | Operating Margin % |
| General Motors Co | GM | $43.68 | 50,425.65 | 5.69 | 5.41 |
| Toyota Motor Corp | TM | $239.16 | 322,263.32 | 10.56 | 11.13 |
| Tesla Inc | TSLA | $171.22 | 545,283.89 | 59.45 | 9.19 |
| Ford Motor Co | F | $13.21 | 52,491.7 | 6.54 | 3.1 |
The Redditor placed Tesla stock under scrutiny over declining growth and a high price-to-earnings (PE) ratio. Comparatively, Toyota TM boasts higher operating margins, yet a lower PE, reflecting a more stable financial position.
Key Insights on Tesla stock from the Reddit Post
- Tesla’s PE ratio stands at 59.45, significantly higher than Toyota’s 10.56.
- Despite Tesla’s lower operating margin compared to Toyota, its market cap surpasses that of Toyota by a significant margin.
Financial Performance And Recent Challenges At Tesla
Tesla’s auto gross margins have dipped due to aggressive price reductions and the global chip shortage crisis. For the first time since 2020, the company saw its vehicle deliveries decline in the first quarter compared to the same period last year. Production disruptions from various factors, including the Red Sea conflict and factory shutdowns, have further impacted Tesla’s performance.
Technicals Indicate A Strongly Bearish Trend For Tesla Stock
Tesla’s stock price is below its short-term and long-term moving averages, indicating a strongly bearish trend.
Multiple technical indicators, including the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI), suggest a bearish sentiment towards Tesla stock.
Tesla’s stock faces significant headwinds, including declining growth, production challenges, and negative technical indicators. Investors should carefully evaluate these factors before making investment decisions in Tesla.
Read Next: Tesla Offering $7K Discount On Model Y? Investor Says ‘Nothing Has Recently Changed’
Image generated using artificial intelligence with Midjourney.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
