$Tesla(TSLA.US) continues its downward trajectory since the Austin robotaxi launch on June 22 (TSLA-13%, NDX +7%), defying bulls’
predictions that the Austin robotaxi launch would propel TSLA to new highs. We offer two reasons for TSLA’s continued underperformance: 1/ Investor expectations were too high going into the event, with TSLA’s forward P/E becoming way overextended relative to consensus forward 5-year earnings growth rates, which continue to fall; 2/Many investors have been disappointed by the slow pace of TSLA’s unsupervised autonomous progress, with safety drivers still in the Austin robotaxi vehicles, which calls into question whether the vehicles will soon be L4/L5 fully autonomous vehicles as promised prior to the event.Many $Tesla(TSLA.US) faithful gave us grief when we exited TSLA in May at $358 on mostly valuation grounds. We were cautious on $Tesla(TSLA.US) mainly due to its extended valuation, but also due to excessive optimism about how quickly TSLA can roll out unsupervised robotaxi across the United States. At 178x 2025 Adj EPS, TSLA is priced at over 2x its historic forward P/E of 78x and 5x its consensus 2025-2030 EPS growth rate (normal megacap growth PEG is ~2x) . Positive TSLA catalysts include removing the safety driver from the front seat of the vehicle as TSLA expands its robotaxi service to more states, and a smaller, more affordable EV pickup. Our 6-12 month $Tesla(TSLA.US) PT remains $310.The copyright of this article belongs to the original author/organization.
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