Close Menu
FintechFetch
    FintechFetch
    • Home
    • Fintech
    • Financial Technology
    • Credit Cards
    • Finance
    • Stock Market
    • More
      • Business Startups
      • Blockchain
      • Bitcoin News
      • Cryptocurrency
    FintechFetch
    Home»Stock Market»Down 45%, could Tesla stock completely crumble?
    Stock Market

    Down 45%, could Tesla stock completely crumble?

    FintechFetchBy FintechFetchMarch 8, 2025No Comments3 Mins Read
    Share Facebook Twitter Pinterest LinkedIn Tumblr Reddit Telegram Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Being a shareholder in Tesla (NASDAQ: TSLA) has always been a dramatic ride. It has been very rewarding for many investors though. Over the past five years, Tesla stock has soared 462%.

    Lately though, things have not been going so well. In fact, Tesla stock has crashed 45% from where it stood in the middle of December. That is a long way to fall in a fairly short time, especially for an enterprise of this size. Even after the crash, Tesla has a market capitalisation of $826bn.

    So does this put Tesla on a firmer footing when it comes to valuation – or could things get even worse from here?

    Brilliant business with a proven track record

    For me, this is not purely an academic question. I am not a shareholder at the moment. But I do think Tesla has a lot going for it as a business. If I could invest at what I thought was a reasonable price I would happily do so (in this regard, I follow Warren Buffett’s maxim of aiming to buy into great companies at attractive prices).

    The market for electric vehicles (EVs) is huge and set to grow over time. Tesla is one of a limited number of players who have proven that they can scale up to a mass-market sales levels – and make money doing so. Its installed base, well-known brand and proprietary technology all makes it attractive to me. Its vertically-integrated production and sales approach also helps set it apart from rivals, in my view.

    Not only that, but its power generation business is already significant and growing fast. Meanwhile, there remains significant untapped potential in fields Tesla is hoping to crack, including self-driving taxis and robots.

    The price could keep falling

    Clearly though, something has happened. Tesla stock did not plummet 45% in a matter of months for no reason. The obvious ones include last year seeing the first ever fall in sales (albeit a small one) and investor concerns that Tesla boss Elon Musk’s high-profile public role may tarnish the brand for some potential customers.

    On top of that, the EV market is becoming more competitive as Chinese rivals like BYD (a long-term Buffett holding) make inroads in markets where Tesla has done well. Tax credits in markets including the US are also at risk, which could hurt profitability for the carmaker.

    Are such risks priced in after Tesla stock crashed? I do not think so. In fact, Tesla stock trades on a price-to-earnings (P/E) ratio of 130.

    If some of the risks I mentioned come to pass and earnings fall, the prospective P/E ratio could be even higher. But just taking the current 130 figure, it is far more than I would be willing to pay for the share.

    I see real value in Tesla, so I do not think the share is driving to zero. However, I still see it as significantly overvalued and think it could sink a lot more even from its current level. For now, I will not buy.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Previous ArticleDogecoin Analyst Predicts Price Explosion—Is $6.24 Far-Fetched?
    Next Article Massive Ripple (XRP) Price Predictions: New ATH Incoming?
    FintechFetch
    • Website

    Related Posts

    Stock Market

    Forecast: in 12 months the Marks & Spencer share price and dividend could turn £10k into…

    August 8, 2025
    Stock Market

    How much do you need in a SIPP to target a £1,250 monthly second income?

    August 7, 2025
    Stock Market

    Why this FTSE 100 stock is 1 for value investors to consider in 2025

    August 7, 2025
    Add A Comment
    Leave A Reply Cancel Reply

    Top Posts

    VC Compliance Is Boring But Necessary — Here’s Why

    May 27, 2025

    Live-To-Work Is Back And It May Cost You A Great Fortune

    March 21, 2025

    The Messy World of Meme Coins Like TRUMP May Not Be Regulated Says SEC Commissioner

    February 12, 2025

    Less Than 1 BTC Might Be Enough to Retire: Here’s Why

    July 26, 2025

    Instapay Technologies and Mastercard Make Cross-Border Money Movement Simpler in Malaysia

    April 13, 2025
    Categories
    • Bitcoin News
    • Blockchain
    • Business Startups
    • Credit Cards
    • Cryptocurrency
    • Finance
    • Financial Technology
    • Fintech
    • Stock Market
    Most Popular

    Complete Guide to the Velocity Frequent Flyer Program: 2025

    February 6, 2025

    Technical Indicators Suggest Bitcoin May Reach $120,000 In Q2, Says Standard Chartered

    April 29, 2025

    The Generational Banking Divide Fintech Marketers Can’t Ignore

    June 23, 2025
    Our Picks

    From Embedded Finance to Intelligent Finance: How AI is Powering the Next Evolution Beyond BaaS: By Sumit Arora

    August 8, 2025

    How to Turn Off Instagram’s New Map Feature

    August 8, 2025

    Bitcoin Cash: Can It Ever Replace the Real Bitcoin?

    August 8, 2025
    Categories
    • Bitcoin News
    • Blockchain
    • Business Startups
    • Credit Cards
    • Cryptocurrency
    • Finance
    • Financial Technology
    • Fintech
    • Stock Market
    • Privacy Policy
    • Disclaimer
    • Terms and Conditions
    • About us
    • Contact us
    Copyright © 2024 Fintechfetch.comAll Rights Reserved.

    Type above and press Enter to search. Press Esc to cancel.