Like him or hate him, Elon Musk’s companies are constantly making headlines and few companies create a greater diversity of opinion than his electric car manufacturer, Tesla Inc. (NASDAQ: TSLA). But 2024 has been a challenging year for EV makers as sales growth has slowed and consumers have cut back on purchasing big-ticket items in the face of elevated interest rates.
Where does Tesla Inc. go from here? In this article, we’ll breakdown the factors currently weighing on TSLA shares, how the company plans to move forward after the Cybertruck mishap and where the stock price could be in the next five years.
Current Overview of Tesla Stock
As of the market close on December 19, TSLA stock was trading at $440.13 per share, representing a gain of 77.17% year-to-date. Tesla's market capitalization is currently around $1.38 trillion, firmly placing it in the large-cap public companies category.
Several factors have recently influenced TSLA's stock price. On the positive side, Tesla continues to dominate the electric vehicle market, with strong sales and production numbers. In 2023, nearly 40% of all EVs sold worldwide came from Tesla assembly lines. The company's expansion into new markets and development of its autonomous driving technology have also contributed to investor optimism. Additionally, Tesla's recent announcement of a new battery factory in Mexico is expected to boost its production capacity and lower costs.
However, TSLA has also faced internal and external challenges. Increased competition from traditional automakers and emerging EV startups has intensified pressure on Tesla's market share and pricing. Musk himself isn’t too optimistic about the future profitability of the oft-recalled Cybertruck either. Concerns about the company's valuation and the sustainability of its growth rate have also led to market volatility. Furthermore, Tesla's full self-driving technology has faced regulatory hurdles and safety concerns, which could impact its future profitability.
TSLA remains a highly volatile stock with significant upside and downside potential. Investors should consider the company's risks and rewards before making investment decisions.
Methodology for Stock Price Prediction
Predicting the direction of any stock is tricky, especially one as volatile and unpredictable as Tesla. Here are three key components used to formulate our Tesla stock price prediction:
- Expert Opinions: Analyst reports and price targets are essential stock analysis tools. They provide insights into a company's financial health, industry trends and competitive landscape, while price targets estimate its future value. By combining these elements, investors can make more informed decisions about whether a stock is undervalued, overvalued or reasonably priced. While these reports are useful, it's important to consider multiple perspectives and the consensus view.
- Fundamental Analysis: This involves evaluating a company's financial health, industry trends and management effectiveness. Investors can identify undervalued stocks with growth potential by analyzing factors like earnings growth, debt levels and profit margins. Fundamental analysis also includes examining financial statements, listening to conference calls, assessing competitive advantage and evaluating management quality.
- Technical Analysis: Analyzing stocks by studying historical price and volume data to identify patterns and trends is known as technical analysis. It focuses on the study of charts and graphs, using various indicators and tools to identify potential buying and selling opportunities. Technical analysts believe that market prices are influenced by supply and demand, which are reflected in price movements. By understanding these patterns, technical analysts can decide when to enter or exit a trade. However, it's not foolproof and should be used with other forms of analysis, such as fundamental analysis.
Tesla Stock Price Prediction for 2024
The year 2024 hasn’t been a banner one for Tesla, but their performance could be more indicative of the weakness in the EV industry. Rivals like Nio Inc. (NYSE: NIO) and Rivian Automotive (NASDAQ: RIVN) have seen even steeper stock declines so far this year and even legacy automakers like Ford Motors (NYSE: F) and General Motors (NYSE: GM) have underperformed the S&P 500 in 2024.
For the rest of 2024, TSLA shares are expected to remain volatile. Interest rates were expected to drop in September, which could help increase sales as automobile loans become more affordable. However, TSLA has a high P/E ratio of 120.68 and failed to meet analyst estimates in its last four earnings releases. Sales revenue did rebound in Q1 2024 following a disastrous Q4 2023 report and the stock has jumped over 20% since June, but investors remain cautious.
From a technical standpoint, TSLA stock is showing signs of life. In late July, the stock’s 50-day moving average crossed back above its 200-day moving average and the Relative Strength Index (RSI) currently shows 75.77, indicating that the stock’s revival over the last three months may have more room to run.
Tesla Stock Price Prediction for 2025
Despite the 2024 slowdown, TSLA shareholders have reasons for optimism. The stock has outperformed competitors despite declining sales growth and Musk remains a figure investors want to support. However, with interest rates still elevated, bottom lines matter and Tesla’s recent earnings numbers have left analysts wanting more.
Benzinga is currently tracking 33 analysts with coverage on TSLA shares. Of those 33, the current consensus is a Hold with an average price target of about $446.67. Morgan Stanley currently has the highest price target at $400 with a Buy rating, while GLJ Research is bearish with a Sell rating and a $24.86 price target. In the most recent conference call, TSLA executives offered no forward guidance.
Tesla Stock Price Prediction for 2030
The next five years will be crucial for Tesla as more and more automobile manufacturers enter the EV sphere and attempt to elbow the firm to the sidelines. Here are a few of the biggest stories to keep an eye on for TSLA’s future:
- Full Self-Driving (FSD) - Musk claims FSD is the key to the company’s future. Still, the technology has received less-than-glowing reviews from testers and regulators are skeptical that it’ll be safer than a human driver any time soon. However, the company plans to launch FSD in Europe and China in early 2025.
- Regulatory and Legislative Headwinds / Tailwinds - Cleaner energy has been at the forefront of many government policies in the United States and Europe, which could boost Tesla sales growth as more regulators push consumers away from internal combustion engines. In the United States, tax credits are available for EV and hybrid vehicle purchasers and many states offer rebates for electric charging equipment. On the downside, the company’s lengthy history of recalls and delays could push back Musk’s ambitious release calendar.
- Geopolitical Concerns - Not only has Musk found himself in the crosshairs of regulators worldwide, but geopolitical tensions could wreak havoc on Tesla’s vehicle production. Tension between China and Taiwan could create problems in the semiconductor industry, as Taiwan produces many materials required for products like NVIDIA Corp’s (NASDAQ: NVDA) wildly successful chips and processors. Companies like TSLA rely on these chips to be readily available and abundant. If access to these semiconductor products becomes limited, TSLA may be forced to raise prices or cut production costs.
Agree with these predictions? Trade futures on this stock with Plus500 in the US and CFDs internationally. Sign up now for a $200 bonus.*
Frequently Asked Questions
Is Tesla a good stock to buy right now?
Tesla’s earnings rebounded in the most recent report, but 2024 has been a down year for EV manufacturers overall and buying TSLA shares right now could be risky if the stock remains volatile.
Does Tesla pay dividends?
Tesla does not pay dividends and currently has no plans to offer dividends to investors. Stock price appreciation is the only form of profit for investors of TSLA shares.
What is a fair price for Tesla stock?
TSLA stock currently has a P/E ratio of 120.68, which indicates it is relatively expensive compared to its recent earnings numbers. Analysts covering the stock have a consensus price target of $446.67, more than 0.80% lower than the current TSLA market price.
Is Tesla a blue chip stock?
While Tesla has become a member of the S&P 500 and has a large market cap, it’s still relatively new in public markets and its volatile stock price makes it difficult to group it with more established blue chips.
Does Tesla stock have a good future?
Electric vehicle sales growth may have slowed, but more and more EVs are still sold every year and investors have shown no shortage of enthusiasm for Musk’s projects. While the present price action is volatile, Tesla’s continued stranglehold on the EV market gives it an advantage.
* Plus500 is a Benzinga Partner and the promotion of this offer was sponsored by the Partner. This does not impact the content at all.
About Dan Schmidt
Dan Schmidt is a finance writer passionate about helping readers understand how assets and markets work. He has over six years of writing experience, focused on stocks. His work has been published by Vanguard, Capital One, PenFed Credit Union, MarketBeat, and Fora Financial. Dan lives in Bucks County, PA with his wife and enjoys summers at Citizens Bank Park cheering on the Phillies.