Tesla Target Price: Will Tesla be able to Sustain its current valuations?

Tesla Target Price: Will Tesla be able to Sustain its current valuations?
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Tesla Target Price is $1250 for the next 12 months. However, the stock is currently in a bearish mode owing to market conditions. While the stock gets premium valuations, it isn’t significantly overvalued.

Latest Tesla Price USD

Tesla Target Price for the Next 12 months: Analyst Summary

Analyst Rating
Target
Buy
$1250

Tesla Target Price using Technical Analysis

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Daily chart for Tesla Inc for the period of over a year, showing the probable supports and resistances in the chart.

Tesla stock price has formed a triple top pattern which is a bearish sign for Tesla Inc going forward. The stock has made an attempt to cross $1200 at least thrice in the recent past but has failed to do the same.

The stock is seen to consolidate in the range of $550 to $850 for a period of more than six months from February to early October, and in the month of October, it shot up from $800 to $1200 within a period of one month. Since then it has shifted the range and is seen consolidating in the range of $800 to $1200.

Currently, the share has been dipping for the last one week and has broken $1000 in the current downtrend. Going forward, the first resistance will be $1000, which is also a psychological level for the stock to begin its upward journey again. If the stock breaks this level then mark of $1150, level formed recently on 5th April will act as the next resistance. $1200 will act as very strong resistance thereafter as the stock has never been able to breach that level with a strong green candle.

Talking about supports, $887 formed on 21st December, is the next support because the stock reversed from its near downtrend from this level. After that $758 should act as the next support as the stock started its upward journey from this level on 15th March 2022. $700 should act as ultimate support as the stock reversed from this level with a very strong bullish candle on 24th February 2022.

But technically speaking there is bearish signals for the stock and a triple top pattern with $1200 as the topmost level that cannot be ignored. As the stock is unable to cross $1200 thrice, there are huge chances that it will see a major downtrend before reversing and touching new heights.

Tesla Price Target using Fundamental Analysis

Valuation analysis is not easy for Tesla Inc. On one hand, if we consider it as an automobile company and compare it with other automakers, it seems expensive, but mind you, if we take into consideration the untapped potential of Tesla transforming the world from conventional fossil fuel vehicles to electric vehicles, it seems undervalued.

The P/E ratio of Tesla Inc is in the range of 200-300x. It touched a peak of 1120 for Q4 2020 and then has started to cool down and is hovering around 200 currently from the past couple of quarters. But to have a P/E of 1120 for an automotive industry shows the following for Tesla Inc as compared to other companies. For example, the P/E of Ford Motors is only 4.68 for Q4 2021-22.

Tesla Inc cannot be compared with Nio Inc and Rivian Motors in terms of P/E ratio, simply because these new generation companies have not reported net profit on their balance sheet yet.

A better method to compare Tesla Inc with other electric vehicle companies is the Price/Sales ratio. It signals the share price per sales or revenue of a company per share. In other words, it is market capitalization divided by revenue. The price to sales ratio for Tesla Inc is 21.56 at present and has shot up from 8.69 in Q2 2020 to this level in Q4 2021.

As compared to Tesla Inc, Ford Motors P/S ratio is in the range of 0.46 -0.50. If we consider Nio Inc as a new-age competitive for Tesla Inc, it is still in the range of 8.89 to 5.86. As Rivian Automotive has not given any remarkable sales, it cannot be compared with Tesla Inc.

The conclusion of the valuation analysis is that Tesla stands out in the pack. It looks very expensive in terms of valuations in comparison to any other automotive company. But Tesla Inc has unparalleled growth opportunities which kind of compensates for it being expensive.

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Tesla Target Price: Future Growth Prospects

  • German Gigafactory-  Recently, Elon Musk traveled to Germany for the opening of a huge Gigafactory in Berlin, Germany. The factory will produce around 500,000 Model Y each year. It also has the capacity to produce 50- gigawatt-hours of rechargeable batteries. This is a huge step towards expanding business. Already, around two-thirds of the EVs in the US are produced by Tesla Inc. Opening a factory in Europe is a statement to expand the business quickly globally and ramp up the production and deliveries.
  • The next factory could be in Australia or New Zealand. Tesla currently has six factories on three different continents. Tesla delivered 936,000 EVs in the last financial year and this figure could expand further and double if the Berlin factory delivers as per prospects.
  • Production of Cybertruck – The production of Cybertruck is already delayed and is eagerly awaited by Tesla followers. If Tesla Inc starts producing Cybertruck by end of 2022, it can give a big boost to Tesla’s numbers and share price. In the recently concluded cyber Rodeo event, Elon Musk announced the plan to start producing Cybertruck and Roadster after operations of the Berlin factory at full scale. Whenever it happens, it is likely to be a game-changer for Tesla Inc.

Tesla Target Price: Conclusion

Tesla has set the bar very high for itself.

There has been a recent correction and technically stock chart shows bearish signs due to a triple top pattern and a major correction is expected going forward due to inflation fears in the US and global uncertainties due to Russia – Ukraine war.

Historically, Tesla Inc has been an expensive stock on the perimeter of valuation ratios and stands out of league from conventional automakers like Ford Motors and General Motors. EV companies like Nio Inc and Rivian Automotive although has great upside potential but operate at a very small level as compared to Tesla.

We can conclude by saying that Tesla has great growth potential and its share price can deliver multifold returns in the coming years but its valuations should further cool down and Berlin and Austin factories should click in the favor of the company.

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.

Tesla Target Price is $1250 for the next 12 months. However, the stock is currently in a bearish mode owing to market conditions. While the stock gets premium valuations, it isn't significantly overvalued.

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