Tesla Inc. TSLA continues trading at 101 times its 2025 estimated non-GAAP earnings while key metrics decline, prompting GLJ Research‘s Gordon Johnson to sound alarm on Monday as tech stocks face a significant market correction.
What Happened: “For all those saying Tesla is ‘cheap,’ it’s still trading at 101x its 2025E non-GAAP EPS estimate versus the Magnificent Seven average of 32x,” Johnson wrote on social media platform X. He emphasized that despite stagnant growth, Tesla maintains 33 buy ratings compared to just 13 sell recommendations from Wall Street analysts.
Johnson highlighted concerning fundamentals: “Tesla’s car sales, EBITDA, and free cash flow should be growing exponentially. There’s just a little problem… none of them are growing, with its 2024 car sales, FCF, and EBITDA all falling year-over-year.” He added, “In short, “Houston, we have a problem.”
The electric vehicle maker’s struggles come amid a broader tech sector meltdown. The Magnificent Seven tech companies collectively lost approximately $780 billion in market capitalization on Monday alone, with Tesla shares plummeting 15.47%.
Wedbush Securities analyst Dan Ives offered a contrasting perspective, urging investors to view the selloff as an opportunity rather than a market collapse.
“We are in the early stages of a 4th Industrial Revolution,” Ives said, citing a projected $2 trillion in artificial intelligence capital expenditures. He recommended focusing on Nvidia Corp. NVDA, Apple Inc. AAPL, Tesla, Microsoft Corp. MSFT, and Palantir Technologies Inc. PLTR during the market turbulence.
“Many times with Tesla, Apple, Google, Nvidia, Amazon, Palantir and others our backs were against the wall and the times appeared dark at that moment…but yet those were the oppy,” Ives wrote.
Why It Matters: Ives maintains his bullish stance, predicting tech stocks will reach new all-time highs in the second half of 2025 despite investor concerns about President Donald Trump‘s administration policies, recession fears, and growth sustainability.
Tesla CEO Elon Musk told Fox Business on Monday that he was running his businesses "with great difficulty" as Tesla shares hit a five-month low, while he remains a key figure in the Trump administration's Department of Government Efficiency.
The tech-focused Invesco QQQ Trust QQQ has officially entered correction territory, dropping more than 10% from recent highs, while the broader SPDR S&P 500 ETF Trust SPY fell 3.04% on Monday.
Tesla has a price target range from $24.86 by GLJ Research to $550 by Wedbush. The latest ratings from UBS, Wedbush, and Baird average $381.67, implying a 77.51% upside.
Price Action: Tesla closed at $222.15 on Monday, down 15.43%, and fell further to $215.01 after hours. The stock is down 41.43% year to date and 53.70% from its $479.86 all-time high on Dec. 17, according to data from Benzinga Pro.
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