Tesla once lauded as a member of the “Magnificent Seven” with soaring stock gains in 2023, now holds a less favorable position as the S&P 500’s biggest loser this year, having seen a steep decline of around 30%.
This downturn has erased approximately $230 billion from the company’s market value, placing it behind even Boeing, which has faced a nearly 29% drop after safety concerns arose from an incident involving an Alaska Airlines 737 MAX.
The shift in Tesla’s fortunes reflects concerns over an apparent slowdown in electric vehicle (EV) sales. Despite being ousted as the world’s leading EV seller by Chinese competitor BYD last year, signs of weakening demand for Tesla vehicles persist in both the US and other markets.
Morningstar analyst Seth Goldstein attributes this to a perception of Tesla failing to deliver on its reputation as a high-growth stock, triggering significant market reaction when growth projections fall short.
The upcoming earnings report on April 17 is anticipated to be a crucial moment for Tesla’s trajectory. Analysts predict earnings of 57 cents per share, indicating a substantial deceleration from the previous quarter.
The reaction to these results could shape perceptions of Tesla’s growth potential for the remainder of the year, according to Goldstein, with flat delivery figures potentially leading to further market skepticism.
Despite divergent opinions, some analysts remain optimistic about Tesla’s future. CFRA analyst Garrett Nelson maintains a $275 price target on the stock, considering it the best option in a challenging market environment. However, others, like Wells Fargo analysts, have downgraded Tesla, citing concerns about its growth prospects.
Criticism has also been directed at Tesla CEO Elon Musk, with investor Ross Gerber suggesting the need for a new leader to navigate the company’s challenges. Musk himself has seen personal losses of $50 billion this year due to Tesla’s declining stock value, underscoring the high stakes involved in reshaping perceptions on Wall Street.
Also read: Tesla’s Future: Enhanced Summon and Autopark Features
