San Francisco, California – Tesla’s stock performance in 2024 has been disappointing, with a significant decline in value. Despite this downturn, the stock has not necessarily become more affordable by a crucial measure.
As Tesla stock continues to struggle, investors and analysts often view such declines as buying opportunities due to potentially lower valuations. The company’s stock has dropped by 34.2% this year, making it the worst performer on the S&P 500. Additionally, shares are currently 60.5% below their peak in late 2021, reflecting challenges in meeting delivery expectations and implementing price reductions.
Analyzing Tesla’s stock valuation over time reveals a downward trend in earnings estimates, aligning with the stock’s decline. Analysts have revised 2024 earnings per share targets, with FactSet reporting a decrease to $2.97 per share. This adjustment has led to a decline in the forward price-earnings ratio for Tesla stock, signaling ongoing challenges for the company.
Looking ahead to 2025, analysts have also reduced earnings estimates, indicating a potential continuation of struggles for Tesla in the coming years. The company’s valuation remains significantly higher than other profitable automakers, such as Toyota Motor and General Motors, highlighting the unique challenges facing Tesla in the market.
Despite the future uncertainties surrounding Tesla, some analysts are optimistic about the company’s long-term prospects beyond 2025. The bullish case for Tesla involves considerations of future innovations, such as small EVs and advancements in self-driving technology and artificial intelligence, which could drive significant profits in the future.
Overall, while Tesla’s stock faces challenges in the present, investors remain hopeful about its potential for future growth and innovation. The company’s valuation continues to be a topic of debate among analysts, reflecting the complex dynamics at play in the automotive and technology industries.