<div id="readability-page-1">Wall Street analysts are becoming increasingly bearish on Tesla (TSLA -10.39%). Following the car maker's first-quarter deliveries announcement, Wedbush analyst Daniel Ives called the report a &#34;disaster&#34; and said CEO Elon Musk needs to &#34;get his act together.&#34; However, Ives still has an &#34;outperform&#34; rating and a $550 target on the stock. Wells Fargo analyst Colin Langan, meanwhile, has been far more critical of the stock, with an &#34;underweight&#34; rating and $130 price target on it. Before the deliveries announcement, Langan predicted that the number would disappoint, while also forecasting that its earnings are about to decline. After the electric vehicle (EV) maker's 13% drop in Q1 deliveries, and given that its pricing has been lower, that looks like a pretty sure bet at this point. Langan also isn't sold on Tesla's robotaxi ambitions and its current technology. With expectations for its robotaxi business high, the analyst thinks the company's investors are set up for disappointment. He said anything short of having a paid fleet of robotaxis on the road by June should be viewed as a negative. <h2>A rare &#34;sell&#34; rating</h2> Former Morgan Stanley chief U.S. equity strategist Adam Parker recently called Wall Street sell-side ratings and price targets &#34;mostly useless.&#34; Having previously worked as a buy-side analyst, I can tell you that sentiment is pretty prevalent among the professionals who actually pick stocks for a living. That is not to say sell-side analysts don't provide good information, financial models, and research, as many do. However, they just aren't always good at picking stocks, which ultimately is not their job. However, &#34;sell&#34; or &#34;underweight&#34; ratings from sell-side analysts are actually quite rare, accounting for only about 6% of all analyst ratings. Having a price target of half the price a stock currently trades at is also a bold call. As such, Langan is going out on a limb compared to most in his line of work, which is quite notable. I also largely agree with him. Bullish Tesla investors, such as Ark Invest's Cathie Wood, largely point to Tesla's robotaxi business as the reason they are willing to pay such a premium for the stock. After all, as largely an automobile company -- one with declining auto sales at that -- Tesla's stock is outrageously valued. The stock carries a forward price-to-earnings (P/E) ratio of over 100 based on 2025 analyst estimates, while its profitable auto peers all have multiples under 8. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/39ce139f9fb845f89c73db74d24ff92f.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="521" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/39ce139f9fb845f89c73db74d24ff92f.png"/> Data by YCharts. However, Tesla is behind in the robotaxi and autonomous driving race. Alphabet's Waymo has been offering autonomous rides to the public since October 2020 when it launched in Phoenix, Arizona, and is now starting to expand into new markets. Tesla, meanwhile, has yet to deliver on any of its many autonomous driving promises, and there are still numerous safety concerns about its offering. Unlike Waymo and others, Tesla has eschewed the use of lidar technology given its added cost, in favor of a camera-vision-only approach. However, the technology has been shown to have issues in certain conditions. Last year, Inside EVs reported that when using Tesla's full self-driving (FSD) technology, vehicles would go rogue in inclement weather and try to make turns that did not exist. Meanwhile, AMCI Testing noted that in over 1,000 miles of testing, drivers had to intervene over 75 times with Tesla's FSD technology. For its part, the National Highway Traffic Safety Administration (NHTSA) has linked Tesla's FSD and autopilot modes to hundreds of crashes. Tesla's efforts with FSD in China have also gone poorly. Electrek recently reported that drivers in China using Tesla's free FSD trial were racking up fines for various violations, including driving in bike and bus lanes and making illegal turns. It appears that, as a result, the company suspended the free trial late last month. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTM0MjkvZ2V0dHlpbWFnZXMtODY0MzA1ODU0LmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTM0MjkvZ2V0dHlpbWFnZXMtODY0MzA1ODU0LmpwZyZ3PTcwMA"/>Image source: Getty Images. </div> <h2>Is Tesla's stock a sell?</h2> Tesla's current valuation can only be justified if the company can become a major player in the robotaxi business. However, there are still a lot of questions about its technology, while rivals such as Waymo already have a big head start. Meanwhile, its core automobile business is struggling mightily. Competition in China, the world's largest EV market, has been hurting sales in that market, while criticism over Musk's dive into politics and the controversial DOGE (Department of Government Efficiency) appears to be dragging down sales in the U.S. and Europe. At this point, a lot of brand damage seems to have been done with a large percentage of the population. Given its high valuation, struggling auto business, and autonomous driving challenges, I think the stock could have a lot of potential further downside from here. </div>

TSLA

Wall Street analysts are increasingly bearish on Tesla (TSLA), with Wedbush's Daniel Ives calling the recent delivery report a "disaster" but maintaining an "outperform" rating and a $550 target. In contrast, Wells Fargo's Colin Langan has an "underweight" rating and a $130 target, predicting earnings declines and expressing skepticism about Tesla's robotaxi ambitions. Analysts note that sell ratings are rare, and Langan's target suggests a significant drop. Tesla's high valuation is questioned, especially as it struggles in the EV market and faces competition from rivals like Waymo.

- Wall Street analysts are increasingly bearish on Tesla following disappointing Q1 delivery numbers, with some analysts issuing low price targets and critical ratings.  
- Concerns center around Tesla's struggles in the robotaxi market and its declining auto sales, compounded by competition and safety issues with its autonomous driving technology.  
- Analysts suggest that Tesla's high valuation is only justifiable if it can succeed in the robotaxi business, which currently faces significant challenges.

Motley Fool

A Wall Street Analyst Says Tesla Stock Could Plunge 50%. Is It Time to Sell the Stock?