Tesla analyst’s firm has sold its entire TSLA position: Here’s why

Tesla analyst Gary Black of The Future Fund revealed today that his firm has sold its entire $TSLA holding, marking the first time since 2021 that it has not had a position in the company’s stock. Black has been a skeptic of the company and relatively pessimistic regarding some things many investors would consider catalysts, outlining his concerns and reasoning for selling the shares. Much of Black’s reasoning concerns Tesla’s price-to-earnings ratio, delivery results and potential delivery figures for the future, and other near-term projects that he does not believe will yield as much value as others perceive. We will break down each concern of Black’s below: ‘Disconnected from Underlying Fundamentals’ Black says that The Future Fund sold its holdings at $358 per share. The firm’s current price target is at $310, and he says it will remain there based on “our forecast of 2030 Tesla volumes of 5.4m and 2030 Adj EPS of $12. Main Concern is P/E Ratio The main concern Black and The Future Fund have is that TSLA “now sells at a 2025 P/E of 188x as earnings estimates continue to fall (-5% in the past week, -40% YTD) driven by weak YTD deliveries, including weak April results.” Black says he believes quarterly deliveries will decline by 12 percent, and full-year by 10 percent. This compares to Wall Street’s estimates of a 7 percent decrease for Q2 and a 5 percent year-over-year. Robotaxi Skepticism “We believe the risk/reward associated with the Austin robotaxi test remain asymmetrical to the downside,” Black writes in his post on X. Tesla Robotaxi deemed a total failure by media — even though it hasn’t been released Many believe the Robotaxi platform could be Tesla’s biggest catalyst moving forward, especially as other automakers do not seem to have even close to as robust a solution to self-driving as Tesla. Tesla’s Affordable Models Black says there are concerns the affordable model will be “a stripped-down Model Y priced lower and funded by lower costs rather than a new form factory that expands TAM.” This is confusing, especially considering the cheaper price tag would expand the total addressable market (TAM) to begin with. The Model Y has been the best-selling vehicle in the world for the past two years. Tesla still on track to release more affordable models in 1H25 Introducing an even lower-cost model with some missing features would still likely be a significantly more attractive option than a base model ICE vehicle, especially because the value Full Self-Driving provides would make the car more beneficial. “This increases odds that FY’25 estimates decline further, risking a repeat of 2023-2024, when TSLA reduced EV prices supported by lower costs, and TSLA saw little or no incremental volume growth,” he finishes with. The post Tesla analyst’s firm has sold its entire TSLA position: Here’s why appeared first on TESLARATI.