A prominent Tesla Inc. TSLA bear has issued a dire warning about the company’s future.
What Happened: Per Lekander, a hedge fund manager who has been shorting Tesla since 2020, has predicted that the electric vehicle (EV) maker could “go bust,” with its stock potentially plummeting to $14, reported CNBC.
Lekander’s comments come after Tesla’s first-quarter vehicle deliveries, which were significantly lower than market estimates.
Lekander, the managing partner at investment management firm Clean Energy Transition, described the first-quarter results as the “beginning of the end of the Tesla bubble.”
"I actually think the company could go bust," he said.
He suggested that the company’s business model, which relies on strong revenue growth, vertical integration, and direct-to-consumer sales, could falter if sales decline.
He asserted that his assessment is rooted in a projection of the company’s full-year earnings per share for this year at $1.40.
Lekander argues that Tesla should be regarded as a “no growth” stock valued at 10 times forward earnings, compared to its current valuation of around 58 times forward earnings. Forward earnings are a crucial metric traders employ to evaluate a stock’s worth.
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He also pointed out that Tesla’s issues in the first quarter were not solely due to supply chain disruptions, as the company claimed, but rather a “demand problem.”
Lekander expressed skepticism about the company’s future, especially since its two main models, the Model 3 and Model Y, are not due for an update until 2025.
“I don’t see any reason whatsoever to see any recovery over the next two years given that these models are stale and given the economy is not rocketing,” Lekander said.
Why It Matters: Lekander’s comments come when Tesla faces a series of challenges. The company’s first-quarter delivery numbers were disappointing. This has prompted analysts to adjust their forecasts, with some even questioning Tesla’s valuation.
However, not everyone shares Lekander’s pessimism. Cathie Wood, the CEO of Ark Invest, has been buying Tesla shares on recent weakness, expecting the stock to reach $2,000 per share in the coming years. Tom Narayan, an analyst at RBC Capital Markets, also believes that Tesla’s energy storage business presents a significant opportunity for the company.
Price Action: Tesla closed the day at $168.38, marking a 1.05% increase. In after-hours trading, the stock rose to $169.99, showing a further 0.96% uptick on Wednesday. Over the past six months, Tesla has experienced a notable decline of 35.53%, according to the data from Benzinga Pro.
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