David Trainer, CEO of investment research firm New Constructs, argues that Tesla’s stock is significantly overvalued, estimating its worth at just $26 per share, which is roughly a tenth of the EV giant's Thursday closing price.
Shares of Tesla Inc. TSLA plunged over 9% following mixed second-quarter results, leading to a debate among Wall Street analysts about the company’s valuation, Fortune reports.
“Tesla's second quarter earnings confirm our view that the stock is one of the most overvalued stocks in the market,” Trainer stated.
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Reasons for Bearish Outlook: Trainer’s bearish outlook is based on several factors, including falling demand, deteriorating margins, and a massive cash burn. He also criticizes the over-reliance on Tesla’s full-self driving business and EV charging network for the company’s valuation, as these segments are not currently materially contributing to the bottom line.
The Bull Case: Despite Trainer’s warnings, Tesla has its share of bulls. Wedbush‘s top tech analyst Dan Ives sees Tesla’s Q2 earnings positively, arguing that the company’s gross margins are stabilizing and that its full self-driving (FSD) AI technology and EV charging network will boost profits in the future.
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